What does devaluation mean?

Discussion in 'Economics' started by riskfreetrading, Feb 19, 2008.

  1. What does the word "devaluation of a currency mean" in a technical economic sense. Is it different from floating rate?
  2. balda


    Aren't you offering some services to straggling traders?
  3. Devaluation of a currency occurs when the currency depreciates and is often associated with excess supply of the local currency do to overly dovish cental bank. The central back in 'printing' money as excess supply overwhelms demand.
  4. This is due to the law of diminishing marginal returns. Each dollar that is printed is worth less than the previous one.