Currency Devaluation

Currency devaluation is the deliberate reduction in the value of a country’s currency relative to a currency (or currencies) of the main trade partners of the country.  Devaluations are more common in pegged or managed exchange rate regimes and often more abrupt in nature than currency depreciation in free-floating markets. Although some devaluations are deliberate, thay are often forced onto authorities by market supply/demand dynamics and thus are often called “letting go of a peg” or “de-pegging”.