I’ve heard commentators state that in places like Egypt, Turkey, and Argentina, that their devaluing currencies benefit tourists with strong currencies. If local prices rise to match the devaluation of the local currency, doesn’t that mean that you can’t exactly buy more with what you have since prices adjust?
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>If local prices rise to match the devaluation of the local currency
They don’t always. Assuming something is produced domestically then exchange rates don’t really matter at all. This generally means things like food, lodging, and services still stay largely the same price. There’s generally a small increase for sure, but it’s not 1:1 with the devaluation. And even then that increase tends to be delayed.
It’s only goods that are imported that will see a direct and immediate increase in price. Those are usually expensive things that tourists aren’t actually going to be buying a lot of. Stuff like cars and electronics is a big one.
Since tourists are almost exclusively buying items in that first category they end up benefiting from a devalued local currency.
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