When the currency is devalued, imports get discouraged because imported goods get more expensive for domestic consumers. When the currency is devalued, the exports receive a boost because the exported goods become relatively cheaper for foreign consumers. You can read about the Balance of Payment Crisis, 1991 – Causes and Measures to Control it in the given link.
The above effect takes place because the devaluation makes the domestic currency relatively cheaper when compared with the foreign currencies.
- Forex Reserves – Meaning, Importance, Advantages (Notes for UPSC IAS exam)
- New Economic Policy of 1991 – Objectives, Liberalisation, Privatisation, Globalisation