Devaluation

Devaluation

Introduction

Devaluation is basically the way to adjust the exchange rate for official reducing central bank gold content of the national currency (in terms of gold standard) or lowering its official exchange rate against foreign currencies. Thus, the devaluation increases the number of units of the national currency that can be exchanged for a unit of one or more foreign currencies. Resorting to devaluation to stabilize the monetary circulation in inflation . The lowering of the official exchange rate is the result of her impairment, her falling purchasing power. Another important reason is the lack of devaluation of the balance of payments . It can be used as a means of improving the balance of ...