Dominic Raab has admitted the pound's value may fall further if there is a no-deal Brexit.
The Foreign Secretary said there had been already been "currency fluctuations" and "some of that is already baked in".
But he claimed it could be a silver lining for British exporters who would find their businesses more profitable overnight.
It comes as the Prime Minister holds a call with the EU's Ursula von der Leyen this morning on whether to ditch Brexit trade talks.
The pound fell about 1% against the dollar and euro on Friday after the PM said no-deal on December 31 was "very, very likely".
Today the pound is worth about €1.09 after it plunged from around €1.30 on the night of the 2016 referendum and never recovered.
Asked if the pound would fall in a no-deal, Mr Raab told the BBC: "Look, I think some of that is already baked in.
"And I think there were likely to be, there's already been currency fluctuations.
"Of course there's a flip side temporarily for that, it's a boost to exporters but obviously it has a challenge domestically."
Families are facing rises in food bills if there is a no-deal Brexit, with 80% of food imports coming from the EU.
The British Retail Consortium warns of increases from 10p on a cucumber to a 500g pack of beef mince going up from £4 to £5.92.
According to Which? tariffs would add 22p to a 300g pack of Danish bacon, 56p to 400g of cheese, 40p to 250g of butter, 12p fo 1kg of white rice, 26p to 300g of chicken and 8p on three yoghurts.
Clothes would also be hit with 12 per cent extra on trousers and blouses and a 10 per cent tariff on cars making a Renault Espace £1,300 more expensive.
Last night the government announced Boris Johnson would lead a new "super" no-deal committee in addition to daily meetings already held by Michael Gove.
The Cabinet Office said £4bn had been spent on preparations and there were now 900 more immigration officers managing the border.
More than 3,000 lorries a week will be mobilised to bring essential drugs and medical equipment into the UK, according to the Mail on Sunday.
But there are fears that even if there is a deal the ports will be snarled up because the UK is leaving the EU's customs and single market rules. Seven huge emergency lorry parks are to be used to manage traffic.
Dominic Raab insisted the UK has "enough diversity of supply" of medicines in the case of a no-deal Brexit.
Asked if he could guarantee the flow of medical supplies to the UK in the case of a no-deal, Mr Raab told the BBC's Andrew Marr Show: "Well of course, with things like vaccines and more generally medical supplies the NHS and DHSC (The Department of Health and Social Care) already have a widespread programme of stockpiling and security of supply.
"So I actually think - you know, there may be shifts - but we've got enough diversity of supply."
Ministers have a series of five contingency plans to get the Covid-19 vaccine into Britain - including an RAF airlift.
