The value of a country’s currency is often judged by weighing it against other countries’ currencies. When one country decides to lower the value of its monetary units, this is known as currency devaluation. As a result, stronger currencies are capable of buying more of the weaker currency.

Most people think of money as something which is used to make purchases. Many do not consider that money may also be purchased. There are numerous types of currencies in the world. Each normally has a different value when they are compared.

For example, one US dollar (USD) may equal seven South African rands (ZAR). This means if a person took one USD to South Africa and exchanged it, she would receive seven ZAR. If, however, South Africa decided to devalue its currency, one USD would purchase more ZAR, perhaps ten, because they would be cheaper.

On the contrary, currency devaluation means that the weaker currency will purchase less of more expensive currencies. If the person with seven South African rands wanted to exchange them for US dollars after the currency was devalued, she would not even receive a full dollar. Her seven ZAR would only equal some cents when converted to American currency.