devaluationdiˌvæl yuˈeɪ ʃən
devaluation (n)
- plural
- devaluations
English Definitions:
devaluation (noun)
an official lowering of a nation's currency; a decrease in the value of a country's currency relative to that of foreign countries
devaluation (noun)
the reduction of something's value or worth
devaluation (Noun)
The removal or lessening of something's value.
devaluation (Noun)
The intentional or deliberate lowering of a currency's value compared to another country's currency or a standard value -- the price of gold for example.
devaluation (Noun)
Depreciation.
Devaluation
Devaluation in modern monetary policy is a reduction in the value of a currency with respect to those goods, services or other monetary units with which that currency can be exchanged. ‘Devaluation’ means official lowering of the value of a country's currency within a fixed exchange rate system, by which the monetary authority formally sets a new fixed rate with respect to a foreign reference currency. In contrast, depreciation is used to describe a decrease in a currency's value due to market forces, not government or central bank policy actions. Under the second system central banks maintain the rates up or down by buying or selling foreign currency, usually but not always USD. The opposite of devaluation is called revaluation. Depreciation and devaluation are sometimes incorrectly used interchangeably, but they always refer to values in terms of other currencies. Inflation, on the other hand, refers to the value of the currency in goods and services. Altering the face value of a currency without reducing its exchange rate is a redenomination, not a devaluation or revaluation.
Devaluation
In macroeconomics and modern monetary policy, a devaluation is an official lowering of the value of a country's currency within a fixed exchange-rate system, in which a monetary authority formally sets a lower exchange rate of the national currency in relation to a foreign reference currency or currency basket. The opposite of devaluation, a change in the exchange rate making the domestic currency more expensive, is called a revaluation. A monetary authority (e.g., a central bank) maintains a fixed value of its currency by being ready to buy or sell foreign currency with the domestic currency at a stated rate; a devaluation is an indication that the monetary authority will buy and sell foreign currency at a lower rate. However, under a floating exchange rate system (in which exchange rates are determined by market forces acting on the foreign exchange market, and not by government or central bank policy actions), a decrease in a currency's value relative to other major currency benchmarks is instead called depreciation; likewise, an increase in the currency's value is called appreciation. Related but distinct concepts include inflation, which is a market-determined decline in the value of the currency in terms of goods and services (related to its purchasing power). Altering the face value of a currency without reducing its exchange rate is a redenomination, not a devaluation or revaluation.
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"devaluation." Kamus.net. STANDS4 LLC, 2024. Web. 18 Apr. 2024. <https://www.kamus.net/english/devaluation>.
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