DEVALUATION

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 ...

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devaluation

Noun

  1. The removal or lessening of something's value.
  2. 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.
  3. Depreciation.


The above text is a snippet from Wiktionary: devaluation
and as such is available under the Creative Commons Attribution/Share-Alike License.

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