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".

BREAKING DOWN '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.

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  2. Deficit

    The amount by which a resource falls short of a mark, most often ...
  3. Surplus

    The amount of an asset or resource that exceeds the portion that ...
  4. Exchange Rate

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

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

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