Devaluation
A deliberate downward adjustment to a country's official exchange rate relative to other currencies. In a fixed exchange rate regime, only a decision by a country's government (i.e central bank) can alter the official value of the currency. Contrast to "revaluation". Investopedia Says:
There are two implications for a currency devaluation. First, devaluation makes a country's exports relatively less expensive for foreigners and second, it makes foreign products relatively more expensive for domestic consumers, discouraging imports. As a result, this may help to reduce a country's trade deficit. Related Terms:
Balance Of Trade
Central Bank
Currency
Current Account
Exchange Rate
Fixed Exchange Rate
Floating Exchange Rate
Revaluation
Surplus
Tequila Effect |