Devaluation is the reduction of a currency's value in relation to other currencies. This often occurs in a fixed exchange rate system, where a government or central bank decides to lower the value of its currency to boost exports by making them cheaper for foreign buyers. When a currency is devalued, it can lead to increased inflation, as the cost of imported goods rises. Countries like Argentina and Zimbabwe have experienced significant devaluation, impacting their economies and purchasing power. Devaluation can be a tool for economic adjustment but may also create challenges for consumers and businesses.