1. Exchange Rates and Trade Mr. Heiner Flassbeck Director, Division on Globalization and Development Strategies, UNCTAD Geneva, 28th March 2012

2. 2 Exchange rates have become disconnected from macroeconomic fundamentals Real effective exchange rate, selected countries, 2000–2011 (Index numbers, 2005 = 100, CPI based), source: IMF

3. Exchange rates have become disconnected from macroeconomic fundamentals Real effective exchange rate, selected countries, 2001–2010 (Index numbers, 2005 = 100, ULC based), source: UNCTAD Secretariat calculation based on Economist Intelligence Unit and OECD for ULC data

4. Carry trade vis-à-vis Japanese Yen, 2005-2012 (Per cent) Source: UNCTAD secretariat calculations, based on IMF, International Financial Statistics database; and national sources. Note:A positive change in the exchange rate indicates an appreciation of the currency concerned. Interest rate differential is calculated considering difference between selected currencies and the yen-denominated asset. Monthly data.

5. Carry trade vis-à-vis Japanese Yen, 2005-2012 (Per cent) Source: UNCTAD secretariat calculations, based on IMF, International Financial Statistics database; and national sources. Note: A positive change in the exchange rate indicates an appreciation of the currency concerned. Interest rate differential is calculated considering difference between selected currencies and the yen-denominated asset. Monthly data.

6. Carry trade vis-à-vis Japanese Yen, 2005-2012 (Per cent) Source: UNCTAD secretariat calculations, based on IMF, International Financial Statistics database; and national sources. Note:A positive change in the exchange rate indicates an appreciation of the currency concerned. Interest rate differential is calculated considering difference between selected currencies and the yen-denominated asset. Monthly data.

7. International reserves and net portfolio investment, 2005-2011 Source: Unctad Secretariat calculations, based on IMF, International Financial Statistics database. Note: Total reserves correspond to total reserves minus Gold and an increase in reserves corresponds capital outflows. Quarterly data.

8. General pattern for exchange rate adjustment Deviations of nominal effective exchange rate from effective purchasing power parity, Brazil,1995-2010 (2000 = 100), source: UNCTAD Secretariat

9. General pattern for exchange rate adjustment Deviations of nominal effective exchange rate from effective purchasing power parity, Argentina,1991-2010 (2005 = 100), source: UNCTAD Secretariat

10. General pattern for exchange rate adjustment Deviations of nominal effective exchange rate from effective purchasing power parity, China,1987-2010 (2000 = 100), source: UNCTAD Secretariat

11. General pattern for exchange rate adjustment Deviations of nominal effective exchange rate from effective purchasing power parity, Republic of Korea,1984-2010 (2000 = 100), source: UNCTAD Secretariat

12. General pattern for exchange rate adjustment Deviations of nominal effective exchange rate from effective purchasing power parity, Thailand,1980-2010 (2000 = 100), source: UNCTAD Secretariat

13. Exchange Rates and Trade Thank you

14. General pattern for exchange rate adjustment Deviations of nominal effective exchange rate from effective purchasing power parity, Malaysia,1980-2010 (2000 = 100), source: UNCTAD Secretariat

15. General pattern for exchange rate adjustment Deviations of nominal effective exchange rate from effective purchasing power parity, Iceland,1989-2010 (2000 = 100), source: UNCTAD Secretariat

16. General pattern for exchange rate adjustment Deviations of nominal effective exchange rate from effective purchasing power parity, Sweden,1980-2010 (2000 = 100), source: UNCTAD Secretariat

17. General pattern for exchange rate adjustment Deviations of nominal effective exchange rate from effective purchasing power parity, Italy,1984-2010 (2005 = 100), source: UNCTAD Secretariat

18. General pattern for exchange rate adjustment Deviations of nominal effective exchange rate from effective purchasing power parity, Hungary,1995-2010 (2000 = 100), source: UNCTAD Secretariat

19. General pattern for exchange rate adjustment Deviations of nominal effective exchange rate from effective purchasing power parity, South Africa,1995-2010 (2000 = 100), source: UNCTAD Secretariat

20. General pattern for exchange rate adjustment: undervalued currencies Deviations of nominal effective exchange rate from effective purchasing power parity, Germany,1980-2010 (2000 = 100), source: UNCTAD Secretariat

21. General pattern for exchange rate adjustment: undervalued currencies Deviations of nominal effective exchange rate from effective purchasing power parity, United Kingdom,1980-2010 (2000 = 100), source: UNCTAD Secretariat

22. General pattern for exchange rate adjustment: undervalued currencies Deviations of nominal effective exchange rate from effective purchasing power parity, Switzerland,1980-2010 (2000 = 100), source: UNCTAD Secretariat

23. General pattern for exchange rate adjustment: undervalued currencies Deviations of nominal effective exchange rate from effective purchasing power parity, Canada,1980-2010 (2005 = 100), source: UNCTAD Secretariat

24. General pattern for exchange rate adjustment: undervalued currencies Deviations of nominal effective exchange rate from effective purchasing power parity, United States,1980-2010 (2000 = 100), source: UNCTAD Secretariat

25. General pattern for exchange rate adjustment: undervalued currencies Deviations of nominal effective exchange rate from effective purchasing power parity, Japan,1980-2010 (2000 = 100), source: UNCTAD Secretariat

26. General pattern for exchange rate adjustment: undervalued currencies Deviations of nominal effective exchange rate from effective purchasing power parity, Australia,1980-2010 (2005 = 100), source: UNCTAD Secretariat

27. General pattern for exchange rate adjustment: undervalued currencies Deviations of nominal effective exchange rate from effective purchasing power parity, New Zealand,1980-2010 (2005 = 100), source: UNCTAD Secretariat