Revaluation

AAA

DEFINITION of 'Revaluation'

A calculated adjustment to a country's official exchange rate relative to a chosen baseline. The baseline can be anything from wage rates to the price of gold to a foreign currency. In a fixed exchange rate regime, only a decision by a country's government (i.e. central bank) can alter the official value of the currency. Contrast to "devaluation".

INVESTOPEDIA EXPLAINS 'Revaluation'

For example, suppose a government has set 10 units of its currency equal to one U.S. dollar. To revalue, the government might change the rate to five units per dollar. This would result in that currency being twice as expensive to people buying that currency with U.S. dollars than previously and the U.S. dollar costing half as much to those buying it with foreign currency.

Before the Chinese government revalued the yuan, it was pegged to the U.S. dollar. It is now pegged to a basket of world currencies.

RELATED TERMS
  1. Exchange Rate

    The price of a nation’s currency in terms of another currency. ...
  2. Devaluation

    A deliberate downward adjustment to the value of a country's ...
  3. Current Account

    The difference between a nation’s savings and its investment. ...
  4. Central Bank

    The entity responsible for overseeing the monetary system for ...
  5. Currency

    A generally accepted form of money, including coins and paper ...
  6. Balance Of Trade - BOT

    The difference between a country's imports and its exports. Balance ...
Related Articles
  1. A Primer On The Forex Market
    Options & Futures

    A Primer On The Forex Market

  2. Currency Exchange: Floating Rate Vs. ...
    Forex Education

    Currency Exchange: Floating Rate Vs. ...

  3. Dollarization Explained
    Forex Education

    Dollarization Explained

  4. Getting Started In Forex
    Options & Futures

    Getting Started In Forex

comments powered by Disqus
Hot Definitions
  1. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  2. Pareto Principle

    A principle, named after economist Vilfredo Pareto, that specifies an unequal relationship between inputs and outputs. The ...
  3. Pareto Principle

    A principle, named after economist Vilfredo Pareto, that specifies an unequal relationship between inputs and outputs. The ...
  4. Budget Deficit

    A status of financial health in which expenditures exceed revenue. The term "budget deficit" is most commonly used to refer ...
  5. Floating Exchange Rate

    A country's exchange rate regime where its currency is set by the foreign-exchange market through supply and demand for that ...
  6. Underwriting

    1. The process by which investment bankers raise investment capital from investors on behalf of corporations and governments ...
Trading Center