devaluation

Vocabulary Word

Definition

Devaluation is when a government decreases the value of its currency in relation to other currencies. This can make a country's exports cheaper but makes imports more expensive.

Examples in Different Contexts

In socio-economic discussions, 'devaluation' might be referenced concerning its impact on people's lives. A social worker might state, 'Devaluation has increased the cost of imported goods, affecting local communities.'

Practice Scenarios

Banking

Scenario:

The performance of our foreign investments has been stagnant over the past quarter. It might be time to reconsider our global strategy.

Response:

Agreed. With the recent currency devaluation, maybe it's time to increase our foreign investments.

Trade

Scenario:

Despite having quality products, our international sales have been lagging. There's need for a massive shakeup in our approach towards the export market.

Response:

I was thinking along the same lines. Maybe a devaluation could help boost our international sales.