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Devaluation |
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Devaluation A decrease in the spot price of a currency. Often initiated by a government announcement.
Devaluation The active decision of a government to reduce the value of its own currency vis a vis other currencies. Devaluation occurs exclusively in fixed currencies, when the currency in question is pegged to another currency. Governments devalue their own currencies to make their exports less expensive in foreign markets. If a company exports its products for the same price in the local (devalued) currency, it is cheaper for consumers to buy those products in their own currency. See also: Depreciation. Devaluation. Devaluation is a deliberate decision by a government or central bank to reduce the value of its own currency in relation to the currencies of other countries. Governments often opt for devaluation when there is a large current account deficit, which may occur when a country is importing far more than it is exporting. When a nation devalues its currency, the goods it imports and the overseas debts it must repay become more expensive. But its exports become less expensive for overseas buyers. These competitive prices often stimulate higher sales and help to reduce the deficit. How to thank TFD for its existence? Tell a friend about us, add a link to this page, add the site to iGoogle, or visit webmaster's page for free fun content. |
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| Exports only started to reap the benefits of commodity prices and a devaluated currency until now," says Juan Arranz, a Santander Investments economist for Argentina. In other words, INRO had not been placed in a position to stabilize the market price, as purchase of rubber was not made possible due to the expression of the DMIP in highly devaluated currencies. It is unlikely that the dollar will be devaluated any further, there is little fat left to trim from current foundry operations, and the quality and cost benefits obtained from statistical process control, have mostly been taken. |
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