A situation in which a nation with a fixed exchange rate regime changes the fixed exchange rate, or parity, value of its currency so that it takes a greater number of domestic currency units to purchase one unit of the foreign currency.

For example, suppose a foreign government has set 10 units of its currency equal to one U.S. dollar. To devalue, it might announce that from now on 20 of its currency units will be equal to one U.S. dollar. This would make its currency half as expensive to Americans, and the U.S. dollar twice as expensive in the devaluing country. Some countries that recently devalued their currencies are Zimbabwe and Brazil.