Currency devaluation & State Exports

The last two years have seen a substantial decrease in the value of the U.S. Dollar relative to other currencies. This creates opportunities for U.S. exporters as the weak dollar works in our favor and U.S. products become more affordable for buyers in other countries.

This is good news for attracting foreign direct investment as well. It is generally accepted, although not a rule, that FDI increases as the host country’s currency devalues. Like exports, property and industrial equipment are more easily affordable. It remains to be seen exactly how exchange rates affect FDI into Oklahoma.

As the chart below shows, the growth in state exports was consistent across price and quantity until 2006 – 2007, when the value of the U.S. dollar began to drop. Oklahoma export sales increased 4%, while the quantity of state exports (in this case, kilograms) increased a dramatic 59%.