Revaluation

Revaluation is an official upward adjustment of a currency's value against a reference currency or basket, carried out by the authorities of a country operating a fixed or managed exchange-rate regime. It is the mirror image of devaluation: instead of cheapening the currency, the government or central bank resets the peg at a stronger level. A revaluation makes imports cheaper for residents and exports more expensive for foreign buyers, so it is typically considered when a country runs persistent trade surpluses or faces sustained upward pressure on its peg. The term is distinct from appreciation, which describes a market-driven rise in a floating currency. Historical examples include China's 2005 adjustment of the yuan's dollar peg. Traders holding positions in pegged currencies treat revaluation announcements as significant event risk.