Posted in Finance, Accounting and Economics Terms, Total Reads: 381
Revaluation refers to upward adjustments of the official exchange rates of the currency of a country. It adjusts the value of currency with respect to a benchmark rate or with respect to another currency.
In a fixed exchange rate regime, a decision of central bank or country's government can alter the official value of currency while in floating exchange rate the correct term will be appreciation. Revaluation can be done when the currency of the nation is pegged to another currency. By revaluation, government can make adjustment to peg or peg the currency to another currency or to a new basket of currencies.
Revaluation is a strategy to increase the buying power of country's currency. This would result in expensive exports and this may cause other nations to look out for alternative market sources.