On the other hand, the volatility of the exchange rate is also important. It adds significant
risks to production for export since it introduces a variable wedge between the units in
which costs are measured in the present and the units in which revenues are measured in
the future. Export activity typically carries some additional risks as compared to normal
domestic production, including international logistics, international marketing,
performance of foreign economies, etc. As such, it is clear that adding risk to the
proposition of exports does very serious damage to growth prospects.