what is currency devaluation example
How it works/Example: A currency is considered devalued when it loses value relative to other currencies in the foreign exchange market. A currency 's devaluation is the result of a nation's monetary policy.A central bank can make the conscious effort to make its currency less valuable.f Country XYZ's currency is set at a fixed exchange rate of 2:1 to the U.S. dollar and, due to a weak economy, XYZ cannot afford to pay the interest rate on its debt outstanding, XYZ may devalue their currency. This means the central bank of XYZ will declare their fixed exchange rate to be 10:1 to the U.S. dollar.