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What's more, currency movements over the past years have unexpectedly made matters worse for many producers. In the first half of the 1980s, it was conventional wisdom to say that the exceptional strength of the dollar was partly responsible for-and helped to offset-the increasing weakness of dollar-denominated commodity prices. All other things being equal, so the argument went, a subsequent fall in the dollar might be expected to give compensating boost to dollar commodity prices.
But now the dollar has fallen, and the very reverse has happened: commodity prices have continued to tumble from the peak they reached in the second quarter of 1984. When calculated in a more representative basket of currencies, such as the Special Drawing Right, the fall looks even more precipitous. In May of this year, for example, the IMF's food price index was a further 10 per cent below its level in the second quarter of 1985.
40.Why is Special Drawing Right adopted generally speaking?