What Are The Objectives Of Devaluation?

Objectives of Devaluation:
Almost all the countries of the world have devalued their currencies time to time to achieve certain economic objects. During great depression of 1930 most of the countries devalued their countries. In 1972 Pakistan devalued its currency up to 132%. In 1993 Care-taker Govt. devalued the currency up to 9%. Following are the main objectives of devaluation.

To Encourage Exports:
Devaluation policy is adopted to increase the exports of the country. As the currency of any country is devalued, the commodities of that country become cheap for the other countries and they increase their demand.
To Discourage the Imports:
As the currency of any country is devalued, the other countries goods become costly to import from that country. So the people reduce their demands for foreign goods.

To Correct the Balance of Payment:
When the balance of payment of any country is unfavourable the devaluation policy is adopted when the currency is devalued, the value of imports increase but the value of exports decreases. So when value of exports will be greater then the value of imports, we will say that balance of payment is favourable.