Currency Politics in the Developing World. Jeffry Frieden, Spring 2017, Paper, “The exchange rate is often said to be the most important price in any economy, for it affects all other prices. Americans are not used to thinking in these terms, in part because the US economy is relatively closed, and in part because the dollar is the world’s principal reserve currency. Nonetheless, a country’s exchange rate has a powerful impact on its economic activity, and this is especially true for developing countries. Because currency policy structures a country’s economic relations with the rest of the world, it can be crucial in determining a poor country’s developmental prospects.Link