What causes Devaluation?

Devaluation is primarily caused by a government's decision to lower the value of its currency relative to other currencies, often to boost exports by making them cheaper on the global market. Factors leading to this decision can include trade imbalances, high inflation rates, or a need to increase competitiveness. Additionally, speculative attacks on a currency or a loss of investor confidence can prompt a government to devalue its currency to stabilize the economy. Ultimately, devaluation can be a tool for addressing economic challenges but may also lead to inflation and reduced purchasing power for consumers.