Currency Devaluation

Currency devaluation refers to the deliberate downward adjustment of a country's currency value relative to another currency, group of currencies, or a standard. Often implemented by a government or central bank, devaluation can stimulate exports by making a country's goods and services cheaper for foreign buyers, thus potentially improving trade balances. However, it can also lead to higher import costs and inflation domestically. Understanding currency devaluation is critical for investors, businesses, and travelers as it impacts exchange rates, purchasing power, and overall economic stability.