Devaluation targets debt primarily: the mechanism is that inflation reduces real debt burden. Debtors gain; creditors lose. This is the hidden transfer mechanism of monetary devaluation — politically achievable in ways that explicit default is not.
Devaluation targets debt primarily: the mechanism is that inflation reduces real debt burden. Debtors gain; creditors lose. This is the hidden transfer mechanism of monetary devaluation — politically achievable in ways that explicit default is not.