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Devaluation - briefly

Devaluation is the depreciation of the value of the national currency. This is always an increase in the price competitiveness (in foreign markets) of the products of the country where they occur. This is done by reducing the price of goods / services of domestic production in foreign currency, which stimulates demand for them, which means that large revenues will flow into the country from its sale (more will be bought, because products / services will become cheaper in foreign currency compared to competitors).

If there are no problems with the balance of payments and budget deficit in the country, there is no need to carry it out. I.e., this means that with such a rate of the national monetary unit the scalped price for goods/services within the country does not cause a drop in demand for those volumes (surpluses) that need to be sold to the side (abroad).

Devaluation is relevant for those countries where the volume of gross trade turnover is tied to exports.

Neglecting the need for devaluation (if it is really necessary, for the benefit of one's economy) can carry hidden inflationary processes that will eventually spill out, but with a stronger impact.

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