The race to the bottom has begun. Confronted with disappointing growth rates, policy makers in some of the world’s largest economies are turning to currency devaluation in the hope this will trigger an export-led recovery.

First came Japan, with the yen falling by just over 20 per cent against the dollar since the central bank launched a turbocharged programme of asset purchases in April 2013. Then it was the turn of the eurozone. The euro has slumped by a similar amount during the past year on the back of the European Central Bank’s own easing moves. Even Beijing may have now quietly decided to weaken the renminbi, after letting it appreciate against the dollar in the second half of last year.

The rationale behind these moves is that a lower exchange rate should help to boost domestic producers in two ways. First, a devaluation will make imports more expensive, leading consumers to ditch foreign goods for products made at home. Second, a depreciation should cheapen the relative price of exports, helping companies to find new customers abroad.