Revaluation

Revaluation is the opposite of devaluation. It applies to currencies whose value is officially set, and means the currency is made more expensive relative to the currency or basket it is pegged to.

For example, if a country pegs its currency at 8 units per US dollar and changes the peg to 7.5 units per dollar, each unit of its currency is now worth more in dollars. The currency has been revalued.

Countries may revalue to reduce inflation, since imports become cheaper; to respond to large trade surpluses and pressure from trading partners; or because capital inflows are pushing up the currency's market value. China allowed its currency to appreciate gradually after 2005, moving away from a fixed peg to the US dollar.

Revaluation makes exports more expensive for foreign buyers, which can hurt exporting industries. For currencies that float freely, a rise in value due to market forces is usually called appreciation rather than revaluation. In accounting, revaluation also means adjusting an asset's recorded value to its current fair value.