What is 'Devaluation'?

Devaluation is the deliberate downward adjustment to the value of a country's currency relative to another currency, group of currencies, or standard. ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌

Term of the Day | Words to Know Devaluation Devaluation is the deliberate downward adjustment of the value of a country's money relative to another currency, group of currencies, or currency standard. Countries that have a fixed exchange rate or semi-fixed exchange rate use this monetary policy tool. It is often confused with depreciation and is the opposite of revaluation, which refers to the readjustment of a currency's exchange rate. Read More » Related to "Devaluation" Currency Fluctuations: How they Affect the Economy Currency fluctuations are a natural outcome of the floating exchange rate system. Read about what effects these changes can have. Read More » What Is A Currency War And How Does It Work? We look at what a currency war is, what factors may lead to it, the impacts of such a strategy, and whether there is a currency war currently. Read More » SPONSORED BY FIDELITY INVESTMENTS When Others Step Back, Fidelity Steps Up Attracting the next generation of talented associates is a top priority for the Fidelity leadership team. Here's what they're doing to navigate the current crisis. Learn More » Floating Rate vs. Fixed Rate: What's the Difference? Why do some currencies fluctuate while others are pegged, and why are currency exchange rates as they are? Here are the differences between floating and fixed exchange rates. Read More » Related Definitions Exchange Rate An exchange rate is the value of a nation's currency in terms of the currency of another nation or economic zone. Read More » Foreign Exchange Market The foreign exchange market is an over-the-counter (OTC) marketplace that determines the exchange rate for global currencies. Read More » Currency Peg A currency peg is an exchange rate policy that pegs a country's central bank rate of exchange to another country's currency. Read More » Spot Rate The spot rate is the price quoted for immediate settlement on a commodity, security or currency. Although actual settlement will take place one to two days in the future, the spot rate is considered the current market price for an asset. Read More » CONNECT WITH INVESTOPEDIA Email sent to: mondemand.forex@blogger.com To update your newsletter preferences or unsubscribe, click here. 114 West 41st St, floor 8 New York NY 10036 © 2020, Investopedia, LLC, All Rights Reserved | Privacy Policy