dewaardering

Devaluation, also known as devaluation, is a deliberate reduction in the value of a country's currency relative to other currencies. This process is typically carried out by a central bank or government to address economic imbalances, stabilize the economy, or influence international trade. Devaluation can have several effects on an economy. It can make imports more expensive, potentially reducing demand for foreign goods and increasing domestic production. Conversely, it can make exports cheaper, potentially increasing exports and boosting economic growth. However, devaluation can also lead to inflation if the reduction in currency value is not accompanied by a corresponding reduction in domestic prices. Additionally, devaluation can lead to capital flight, as investors may move their funds to countries with more stable currencies. This can result in a loss of foreign exchange reserves and further economic instability. Devaluation is often used as a tool in international trade negotiations, as it can provide a country with a competitive advantage in global markets. However, it is important to note that devaluation can also have negative consequences, such as increased unemployment and reduced living standards. Therefore, it is typically used as a last resort and is often accompanied by other economic policies to mitigate its potential negative effects.