Recent Examples of devaluation from the Web
These days, Von Anhalt complains of his ancestral name's devaluation.
Two years ago this week, though, China ruined the summers of many foreign-exchange and equity traders with a surprise devaluation of its currency.
Treasury Department officials are negotiating a side agreement that would bar currency devaluations aimed at gaining a competitive advantage.
In February the central bank reduced its main interest rate by one percentage point, the first cut since the devaluation.
Indian currency devaluation made rising U.S. college tuition even less affordable.
The Venezuelan government called the launch a response to a financial crisis that has prompted a profound devaluation of the national currency, the bolívar, and quadruple-digit inflation.
The political climate and peso devaluation contributed to that slump, aviation director Russ Handy said.
A month later, the government allowed the devaluation of the rupee.
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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