What is devaluation in economics?

Business & Management
#1

Devaluation refers to the sudden fall in the value of a currency against other currencies. Strictly, devaluation refers only to sharp falls in a currency within a fixed exchange rate (policy, although in recent years reluctant devaluers have blamed financial SPECULATION]. Most studies of devaluation suggest that its beneficial effects on competiveness are only temporary; over time they are eroded by higher prices.