Recent Examples of devaluation from the Web
Economic policymakers in Beijing have regained some of their standing, which had been dented by a stockmarket crash and a ham-fisted currency devaluation in 2015.
Back in 2015 investors trusted that China’s Communist dictatorship had such control over the economy that nothing could go wrong; hence, the big market impact from a small devaluation.
Other signs point to China steadying its course after a stock market crash and surprise currency devaluation two years ago shook the financial world and brought the country’s long-term problems to the fore.
Luxury brands suffered in late 2015 and 2016, after China’s anticorruption drive and currency devaluation hit sales.
Unable to use the European common currency, the euro, Catalonia would risk serious devaluation and inflation, Ros says.
To begin with, homes will see a 13 percent devaluation and maybe more.
Analysts and investors say the cost of a bailout is cheaper than cleaning up the mess of a devaluation, given that six out of the five nations in the GCC have pegged their currencies to the U.S. dollar for decades.
However well administered during sanctions and a rouble devaluation, the economy still depends too heavily on natural resources.
These example sentences are selected automatically from various online news sources to reflect current usage of the word 'devaluation.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.
First Known Use of devaluation
Financial Definition of DEVALUATION
What It Is
Devaluation refers to a decrease in a currency's value with respect to other currencies.
How It Works
A central bank can make the conscious effort to make its currency less valuable. If Country XYZ's currency is set at a fixed exchange rate of 2:1 to the U.S. dollar and, due to a weak economy, XYZ cannot afford to pay the interest rate on its debt outstanding, XYZ may devalue their currency. This means the central bank of XYZ will declare their fixed exchange rate to be 10:1 to the U.S. dollar. This makes their debt outstanding is now worth five times less. It's a very tricky maneuver with grave economic consequences.
Why It Matters
Whether deliberate or as a result of market climate, currency devaluation reduces the price of a country's domestic output. This has the potential to benefit the economy by helping to increase its export volume. Conversely, import volumes become stifled as the price of foreign-produced goods and services increases dramatically.
The opposite of devaluation is known as revaluation.
For a more thorough explanation of currency devaluation, how China manipulates its currency worth and the economic impact following Argentina's devaluation, please read this educational article: How Money Manipulation on the Other Side of the World Could Affect American Portfolios
legal Definition of devaluation
- portfolio devaluation
Seen and Heard
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