A devaluation leads to a decline in the value of a currency making exports more competitive and imports more expensive. Generally, a devaluation is likely to contribute to inflationary pressures because of higher import prices and rising demand for exports.

What happens when you devalue a currency?

Devaluation reduces the cost of a country's exports, rendering them more competitive in the global market, which, in turn, increases the cost of imports. ... In short, a country that devalues its currency can reduce its deficit because there is greater demand for cheaper exports.

Why is it bad to devalue currency?

It is only symbolic of the fact that the central bank of a nation is printing currency faster than its peers. Devaluation absolutely distorts all prices in the economy. As such it also interferes with the price signals that the market sends.