Question

What's the effect of devaluation ?​

Answer 1

Answer:  Exports are cheaper to foreign customers. Imports more expensive. In the short-term, a devaluation tends to cause inflation, higher growth and increased demand for exports.

Devaluation can aggravate inflation. If this happens, the government may have to raise interest rates to control inflation, but at the cost of slower economic growth.

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Answer 2

Answer:

Exports are cheaper to foreign customers whereas Imports more expensive.

Explanation:

It results in a decline of export prices in foreign currency greater than the decline of import prices in foreign currency.