After World War I began a new era of economic development.The most important distinguishing characteristic of this phase was the change of the ruling for a long time the gold standard system, based on a paper notes.Thanks to the measures the government had a fantastic opportunity to increase spending on the budget article by deficit financing.This, in turn, negatively affected the right value for money.On the domestic currency depreciation affected the purchasing power of the population.On the external national currency decreased its value in relation to the money of other countries.In economics, this process is called devaluation.With him familiar people who lived in the Soviet Union and formed after the collapse of the CIS countries - Russia, Ukraine, Belarus and others).
in the world and national economies, there is also a process such as the revaluation.This is the opposite of devaluation of the term.On it will be discussed in this article.
etymology of the concept
revaluation - is a term that was borrowed from Latin.If we consider the concept of a morphological point of view, we can distinguish two components: the prefix "re" and the foundation «valeo».The first part means "increase, increased."The second - "to make a difference, to be valuable."When put together, the words, the following: increase in value.
Gradually the term was used in the economy.To date, the revaluation - is the process of increasing the value / exchange rate of one or another country in relation to the currencies of other states or supranational currency.
first application.International level
In this case, the revaluation of the national currency - is a common and familiar to many countries in term for the rising cost of means of payment within the state in relation to the international monetary and currency and currencies of other countries.
Usually, this process often becomes one of the methods of recovery of the economy after inflation.At the same time in such a situation it is possible to buy cheaper money of any state.This has a positive effect on the business of imports of goods and products, as well as the work of importers of capital.On the other hand, the revaluation of the currency - it is probable and almost inevitable loss of profits / customers for businesses whose activities the basis of export goods abroad.
second application.National level
The structure of the monetary system of a country at the national level, this process can also take place.For example, the government wants to know what is the total amount of reserves of the state, on the balance of the Central Bank, based on the exchange rate.For this issue should be re-evaluation of the entire cash.This process has a specific name - "revaluation".This action is carried out at regular intervals or based on financial factors (crisis, war, and so on. D.).
third area of application.Industry level
At the micro level it is also possible to use the term under review.For example, when evaluating the property, which is an asset of the organization.In this case the revaluation is revaluation of all balance sheet to account for the effects of inflation.First of all fixed assets are taken into account, the capital and various reserves.
Negative points
As a rule, a country which wants to stabilize its economy by revaluation, puts himself in an ambivalent position.On the one hand, this process will strengthen the national currency.This is the most important positive point.On the other hand, the decision of the government affected by a number of negative factors:
1. Reducing the volume of investments in the national economy from abroad.
2. Unsuitable conditions for attracting tourists and tourism development.
3. The revaluation of the currency is also falling demand for domestic goods in foreign markets.
It is because of these drawbacks sufficiently large, this process occurs much seldom.Perform revaluation afford only the strong financial situation of the country.These include Germany, Japan, Switzerland.Once in the XIX century to stabilize its economy also benefited from the appreciation of the US and Britain.
Outflows
As noted above, the method in question is used as a means of combating inflation.In standard situations revaluation is the only solution for the urgent need to import goods (as the national goods become uncompetitive for exports because of their high cost) or export of capital.
If the government decided to carry out this process in the context of the economic crisis, it should be ready to drop in the level of foreign business interests.As a rule, foreign companies are not interested in investing in the unfavorable exchange rate for them.And the last is automatically set as a result of the revaluation.At the same time the domestic market fall in the level of national cash could not stop.Under the conditions of the Russian economy the revaluation of the ruble - is the method to which it is not necessary to resort because of the lack of high inflation.In addition to its activities in the country carries out a huge number of enterprises with foreign capital.Therefore, the revaluation will lead to a decrease in investments and a new round of weakening the economy.
