Devaluation of Currency and Its Impact

Essay by spadekingCollege, UndergraduateB+, October 2012

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Currency Devaluation

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Currency Devaluation


Devaluation itself, indicating that we are discussing about some decreasing in the sense of rupees and sometimes in terms of gold. When the currency of any country is decreased as compared to other country then this means that your country's currency is devaluating and similarly, if the same thing will happens with the gold, so if the price of gold will decrease as compared to other countries then this also means devaluating of currency. This is not like that the devaluation of currency occurs in only one country only. This occurs in all over the world but this is best represented by one country' currency. Devalue of derivative is also called a devaluation. The words which are used in this terminology are devaluation and depreciation. These are the terminologies which are commonly used in the terms of supply of money which is determined by the demand of money and interplay.

When the fixed amount of country's currency is getting low or it's been got lowered and at the same time senior level management in formal manner assigned another a fixed rate after looking and observing the foreign currency. If we look at the past then we will see that there were coins at that time which were gold and silver and on these coins there were the recognized currencies on the supervision of management which are responsible for the purity of it. When the government thinks that there is need of more money so then they decrease the quantity of coins of metals and not even this but they also decrease the weight and purity of coins, therefore currency is devaluating.


Devaluation is implemented and applied to correct and maintain a rise and fall in...