7/23/2019 You Must Know the Concept of Revaluation and Devaluation of Money

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You must know the concept of revaluation and devaluation of money.

Revaluation- when currency appreciates.

For Example- 1$= Rs !. "fter revalution- say 1$ = Rs ##.

evaluation is %ust the opposite& with 1$=Rs ! 'ecomin(& lets say& 1$=Rs #.

Revaluation makes exports costlier and imports cheaper. )hereas& Devaluation makes

exports cheaper and exports costlier.

Reasons for Devaluation Of yuan.

1. China's exports had been declining and faced with stalling manufacturing sector,

China's central bank decided to devalue to make be exports competitive and to pare down

borrowing costs.

2. China has been lobbying to include yuan in I!'s reserve currency's basket which areused by the "ashington based fund to lend to sovereign borrowers. #he current members

of the group are the $% dollar, yen, euro and &ritish pound.

iana *hoyleva& chief economist at +om'ard ,treet Research& said the devaluation was a

necessary re-'alancin( of (lo'al currencies that would encoura(e *hinese companies and

households to spend their savin(s. ,he said it was necessary for the , to accept the move

and apan to end its reliance on competitive devaluations to maintain its own exports.