It refers to reduction in the value of domestic currency in terms of foreign currency under fixed fixed exchange rate system .Revaluation is done by government deliberately to correct balance of payment situation . It encourage export and discourage import.

Devaluation is the deliberate downward adjustment of the value of a country's money relative to another currency, group of currencies, or currency standard. Countries that have a fixed exchange rate or semi-fixed exchange rate use this monetary policy tool. It is often confused with depreciation and is the opposite of revalution, which refers to the readjustment of a currency's exchange rate.


KEY TAKEAWAYS

Devaluation is the deliberate downward adjustment of a country's currency value.

The government issuing the currency decides to devalue a currency.

Devaluing a currency reduces the cost of a country's exports and can help shrink.