What Is Currency Devaluation?
The IMF uses devaluation mainly for currencies with a fixed exchange rate, when the official rate is moved down.
Video coming soon. The lesson video will appear here once it is published on YouTube.
Check yourself: sample questions
Think about each question, pick what you would answer if you like, then select “Show answer” to see the solution and why. Nothing is graded or sent to us. Example numbers are worked examples, not predictions.
1.What is currency devaluation, per the IMF?
The IMF uses devaluation mainly for currencies with a fixed exchange rate, when the official rate is moved down.
2.What is it called when a floating currency is pushed down by the market?
Same direction, different cause; inflation means money buys less at home, devaluation means it buys less abroad.
3.The crown is devalued 20 percent, so 1 crown buys 0.80 dollars. How many crowns buy 1 dollar?
Each dollar now costs 1.25 crowns; 100 dollars cost 125 crowns.
Full course: 5 more questions for this lesson
The full course unlocks all self-check questions of all 365 lessons, the daily plan, your progress and the printable learning record. Lessons 1 to 7 are completely free.
See the full course Start the free week
Already bought? Open the course on this device
Sources (4)
- IMF: Glossary, Study Guide to 'The Fabric of Reform' (Eintrag Devaluation, Exchange rate)
- UK Government, History of Government Blog (Gill Bennett): What's the Context? 18 November 1967: Devaluation of sterling (17.11.2017)
- Banco Central de la República Argentina (BCRA): Informe Monetario Mensual, December 2023
- Eigene Berechnung (synthetisches Beispiel, Python)
Education only. Not financial advice.