The devaluation of the ruble is the official depreciation of its exchange rate against the currencies of other countries that are international accounting units. Until the 70s of the twentieth century, the term "devaluation" meant a decrease in the real gold content of the monetary unit.
In Russia, devaluation is carried out by the Central Bank. The ruble exchange rate is pegged to a currency basket consisting of two currencies: 55% dollars and 45% euros. The ruble exchange rate in our country is floating, it changes within the currency band, which is the minimum and maximum value of the ruble exchange rate against a basket of foreign currencies. In case of devaluation, the Bank of Russia expands the currency corridor. The opposite effect of devaluation is revaluation, i.e. official appreciation of the national currency.
There is an official (open) and hidden devaluation. With an open devaluation, the Central Bank officially announces the devaluation of the ruble, depreciated banknotes are withdrawn from circulation, and they are exchanged for new money. But at the same time their rate is lower, it corresponds to the value of the depreciation of old money. With a hidden devaluation, the state reduces the real value of the ruble in relation to the currency basket, without removing the depreciated money from circulation. Open devaluation always results in lower commodity prices. As a rule, latent devaluation does not lead to price changes.
The term “devaluation” is often replaced by the term “inflation”. In fact, these concepts are pretty close. But inflation is associated with the purchasing power of the ruble domestically, while devaluation is related to the purchasing power of foreign currencies. Sometimes devaluation causes inflation within a country. If foreign currencies are subject to inflation, then devaluation is possible without it.
The consequence of the devaluation of the ruble is to stimulate exports, since the exporter, when exchanging the earned foreign currency for the depreciated national currency, receives a devaluation income. In addition, as a result of devaluation, domestic demand for goods of its own production increases, and the rate of spending of gold and foreign exchange reserves decreases.
The most significant negative consequence of the devaluation is a decrease in confidence in the national currency - the ruble. Devaluation leads to higher prices for imported goods, they become less competitive compared to their domestic counterparts, therefore, imports are limited. In addition, as a result of devaluation, deposits in rubles are depreciated, they are drastically withdrawn from accounts, and the purchasing power of the population is falling.
