Effects of the fall in commodity prices have been “less painful” for Latin American countries that use a flexible exchange rate, a chapter from the International Monetary Fund’s World Economic Outlook finds.

Across South America, export revenues have fallen by a third as the price of oil, metals and some agricultural products declined. However, the subsequent shocks were muted somewhat in countries that operate a flexible exchange rate as a “shock absorber”.

Using a ‘sacrifice ratio’ – the