Devaluation

Under a fixed or pegged regime, the government or central bank sets the exchange rate. Lowering the official value of the home currency (so more home currency is needed per unit of foreign currency) is devaluation; raising it is revaluation.

Under a floating regime, the same movements caused by market forces are called depreciation (fall in value) and appreciation (rise in value).

Effects of devaluation or depreciation:

• Exports become cheaper for foreigners, and imports become dearer, which may improve the trade balance over time (subject to the Marshall-Lerner condition and the J-curve effect, where the balance first worsens).
• Import prices and inflation rise, especially in import-dependent economies.
• The burden of foreign currency debt increases in home currency terms.
• Remittances and export earnings are worth more in home currency.

Nepal has devalued its currency several times in the past, both against the Indian rupee and against convertible currencies. Under the current peg, the rupee's value against the US dollar changes as the Indian rupee moves, which is depreciation or appreciation, while a change to the NPR-INR parity would be a devaluation or revaluation.

स्थिर/पेग प्रणालीमा सरकार वा केन्द्रीय बैंकले दर तोक्छ; स्वदेशी मुद्राको आधिकारिक मूल्य घटाउनु अवमूल्यन (devaluation) र बढाउनु पुनर्मूल्यन (revaluation) हो। लचिलो प्रणालीमा बजारका कारण मूल्य घट्नुलाई depreciation र बढ्नुलाई appreciation भनिन्छ।

अवमूल्यनका असर: निर्यात सस्तो र आयात महँगो हुने, समयक्रममा व्यापार सन्तुलनमा सुधार हुन सक्ने (मार्शल-लर्नर सर्त, J-curve), आयात मूल्य र मुद्रास्फीति बढ्ने, विदेशी ऋणको भार बढ्ने र विप्रेषण तथा निर्यात आम्दानीको स्वदेशी मूल्य बढ्ने।

नेपालले विगतमा भारतीय रुपैयाँ र परिवर्त्य मुद्रा दुवैसँग पटक-पटक अवमूल्यन गरेको छ। हाल अमेरिकी डलरसँग दर बदलिनु depreciation/appreciation हो भने नेरू-भारू दर परिवर्तन devaluation/revaluation हुनेछ।