Devaluation

Devaluation refers to a reduction in the value of a country's currency relative to others. This often happens when a government decides to adjust the exchange rate to boost exports by making them cheaper for foreign buyers. While it can help improve a country's trade balance, devaluation also means that imported goods become more expensive, which can lead to inflation. Essentially, it affects how much a currency can buy, impacting both consumers and businesses within the country.