Devaluation means an intentional decrease in the value of a country's domestic currency. This is an important tool that is adopted by governments as a monetary policy. It is often mixed up with the depreciation of currency that is relative to another currency like USD depreciates against GBP.
The reason for devaluation is to control imports and increase exports. When a currency devalues the domestic users are forced to restrict use of imported items as they are more expensive. On the other hand, the export items are now cheaply available for which the foreign users are encouraged to use imported products at cheaper rates. This will turn the balance of payments in a more favorable position and reduce the trade deficit.
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