Devaluation

How it is used

A policy decision, not a market movement: a country announces or carries out a devaluation. Historic examples include the UK's devaluation of the pound in 1967 and several Turkish devaluations before the lira was floated in 2001.

Example sentences

1. The devaluation made exports more competitive but raised the cost of living.

2. The central bank announced a 15% devaluation of the currency overnight.

Common collocations

• announce a devaluation
• currency devaluation
• competitive devaluation
• a sharp devaluation

Related terms

• depreciationA fall in the value of a currency against other currencies under a floating exchange rate, driven by market forces rather than an official decision.
• exchange rateThe price of one currency expressed in another, for example how many Turkish lira you need to buy one US dollar or one euro.
• exportA good or service sold to buyers in another country; as a verb, to sell goods or services abroad.
• balance of paymentsA record of all money flows between a country and the rest of the world over a period, divided into the current account and the capital and financial account.

This word in other fields

The same English word can have a different meaning in another field:

• devaluation · Finance & Banking

More terms: Trade and Exchange Rates

• import
• trade deficit
• tariff
• current account deficit
• comparative advantage
• protectionism
• foreign direct investment
• free trade
• currency
• appreciation
• globalisation
• trade balance