In recent months, the currencies of the Brics (in the version with four: Brazil, Russia, India and China) recorded the largest depreciation since 1998, when the 'Asian crisis' raged. For the first time the Brazilian real, the Russian ruble and the Indian rupee are leading the list of weak currencies of emerging countries, while the Chinese yuan is recording the fastest depreciation since the devaluation of 1994. For the ruble the problem lies in the fall in oil prices, for China, as well as for Brazil, the slowdown of the economy, a slowdown which, for India, is aggravated by inflation and by investors' worries about the public deficit.
But you have to keep perspective. In many cases, and especially for Brazil, the depreciation is a reaction to the previous excessive appreciation. And, if we look at the real effective exchange rate (which takes into account inflation and all the currencies of the partner countries), on average for the BRICS (including South Africa) the real exchange rate, which has depreciated by 6% compared to the maximum mid-2011, however, is still 10% stronger than in early 2007, before the Great Recession.
