Devaluation

Devaluation is a deliberate downward adjustment of a currency's value, typically carried out by a central bank that maintains a fixed or managed exchange rate, in order to boost export competitiveness or relieve pressure on reserves. It's distinct from depreciation, which describes a currency weakening naturally through market forces rather than policy action. Devaluations can happen abruptly and produce large single-day price gaps, which is a key reason pegged or managed currencies can carry outsized risk for leveraged traders.