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Devaluations: meaning, definitions and examples

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devaluations

 

[ˌdiːˌvæljuˈeɪʃənz ]

Definitions

Context #1 | Noun

economic policy

Devaluations refer to the reduction in the official value of a country's currency in relation to other currencies. It is often done by governments as a measure to boost exports and correct trade imbalances.

Synonyms

currency depreciation, currency devaluation.

Which Synonym Should You Choose?

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Word Description / Examples
devaluations

This term is used to describe a general decrease in the value of a currency. It can apply to various contexts such as economic policies, market conditions, or historical financial trends.

  • The country has faced several devaluations of its currency over the past decade.
  • Economic instability often leads to devaluations and a loss of investor confidence.
currency devaluation

This term is often used to describe a deliberate action taken by a country's government or central bank to reduce the value of its currency relative to other currencies, typically to boost exports or decrease trade deficits.

  • The government announced a currency devaluation to make its products more competitive internationally.
  • Following the currency devaluation, the cost of imported goods soared, affecting consumers.
currency depreciation

This phrase usually refers to the gradual loss in value of a currency due to market forces and is often observed over a longer period. Common in discussions about foreign exchange markets and investment strategies.

  • The currency depreciation has made exports cheaper for foreign buyers.
  • Investors are concerned about the ongoing currency depreciation against the dollar.

Examples of usage

  • Following the devaluations, the country's exports became more competitive in the global market.
  • Devaluations can lead to inflation as imports become more expensive for the citizens.
Context #2 | Noun

financial markets

Devaluations can also refer to the decrease in the value of assets, investments, or securities. This can happen due to various factors such as market conditions, economic downturns, or company performance.

Synonyms

depreciation, loss of value.

Which Synonym Should You Choose?

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Word Description / Examples
devaluations

Often used in economic and finance contexts to describe a deliberate reduction in the value of a country's currency relative to other currencies, typically by a government or central bank.

  • The government announced a series of devaluations to boost exports.
  • Frequent devaluations have shaken investor confidence.
depreciation

Commonly used in accounting and finance to describe the reduction in value of an asset over time, due to wear and tear, age, or obsolescence. It can also refer to a general decline in the market value of a currency.

  • Companies must account for the depreciation of their equipment and buildings.
  • The depreciation of the local currency has led to higher import prices.
loss of value

A more general term that can apply to any situation where something becomes worth less than it was before. It can be used in various contexts such as economics, investments, and everyday items.

  • The loss of value in her investments was significant during the recession.
  • After several years, the car experienced a noticeable loss of value.

Examples of usage

  • The stock market crash led to massive devaluations of many companies' shares.
  • Investors are concerned about potential devaluations of their portfolios in uncertain times.

Interesting Facts

Economic Theory

  • Devaluation often happens when a country decides to lower the value of its currency intentionally to boost exports, making goods cheaper for other countries.
  • It can lead to short-term benefits like increased tourism, as visitors find products and services cheaper than in their home countries.

Historical Events

  • The Great Depression in the 1930s saw many countries devaluing their currencies in hopes of economic recovery, which led to significant global economic changes.
  • In 1967, the British pound was devalued under Prime Minister Harold Wilson, creating major political and financial challenges.

Influence on Daily Life

  • People might notice higher prices for imported goods if their country devalues its currency, as they now take more of the local currency to buy the same product.
  • Devaluation can affect savings, as the purchasing power of money decreases, meaning you can buy less with the same amount.

Cultural Impact

  • In literature, devaluation can be a metaphor representing loss of worth, as seen in narratives exploring economic hardship or personal failures.
  • Films such as 'The Big Short' illustrate the consequences of financial devaluation through storytelling that engages audiences on economic crises.

Psychological Effects

  • Devaluation can lead to public anxiety, as people worry about their money becoming less useful, influencing spending and saving behaviors.
  • The phenomenon can also trigger societal changes, as communities may react by forming support systems to cope with economic instability.

Translations

Translations of the word "devaluations" in other languages:

🇵🇹 desvalorizações

🇮🇳 मूल्यह्रास

🇩🇪 Abwertungen

🇮🇩 devaluasi

🇺🇦 девальвації

🇵🇱 dewaluacje

🇯🇵 価値の下落

🇫🇷 dévaluations

🇪🇸 devaluaciones

🇹🇷 devalüasyonlar

🇰🇷 평가 절하

🇸🇦 تخفيضات القيمة

🇨🇿 devalvace

🇸🇰 devalvácie

🇨🇳 贬值

🇸🇮 devalvacije

🇮🇸 gengisfellingar

🇰🇿 девальвациялар

🇬🇪 დევალვაციები

🇦🇿 devalvasiyalar

🇲🇽 devaluaciones

Word Frequency Rank

This word's position of #30,514 indicates it's among the more rare English words. While understanding it broadens your vocabulary, focus on more common words first.