Currency devaluation

Currency devaluation is an option for countries with fixed exchange rate. If it seems impossible to defend the fixed exchange rate, a country can implement a devaluation of their own currency.

A devaluation means that you write down the value of the currency against another currency. If the fixed exchange rate between Sweden and the United States is 10 SEK/USD, a devaluation of the Swedish exchange rate might mean that the new rate will be 15 SEK/USD. A devaluation of the exchange rate will make it easier for Swedish exporters to sell goods to the United States.