Revaluation

noun (countable/uncountable)

/ˌriːvæljuˈeɪʃən/

The upward adjustment of a currency's official exchange rate under a fixed or managed exchange-rate regime, or the reassessment of an asset's value to reflect current market conditions. In international economics, revaluation strengthens the domestic currency, making exports more expensive and imports cheaper, which can reduce a trade surplus. China's managed revaluation of the renminbi between 2005 and 2015 by approximately 35% was a key point of contention in global trade negotiations.

✍️ Usage in a UPSC answer

Periodic pressure on China to undertake a sharp renminbi revaluation dominated G20 macroeconomic coordination discussions throughout the 2010s, as the US Treasury argued that an undervalued currency was subsidising Chinese exports at the expense of American manufacturing.

Synonyms

currency appreciationupward adjustmentrate increaseexchange-rate strengthening

Antonyms

devaluationcurrency depreciationdownward adjustmentdebasement

🌱 Word Family

revalue (verb), revalued (adjective), devaluation (antonymous noun), currency appreciation (related phrase), overvaluation (related noun)

🔡 Root

Latin re- = again + valere = to be worth; valuation from Medieval Latin valuare = to value

📜 Etymology

Constructed from Latin re- (again) and valuation (from valere, to be worth), the compound came into standard financial usage under the Bretton Woods fixed exchange-rate system (1944–1971), when governments officially 'revalued' or 'devalued' their pegged currencies. After the collapse of Bretton Woods and the shift to floating rates, revaluation became more relevant to countries maintaining managed floats or crawling pegs, notably China's renminbi management.

🧠 Memory Hook

RE + VALUATION: to VALUE again, upward. Think of revaluing a property — the assessor comes back (re-) and decides it is worth MORE. For a currency, revaluation means the government says: this coin is worth more foreign currency than before.

💰 Indian Economy 📖 Seen in: Indian Economy — Growth, Planning & De...

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