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Currency Devaluations of the 1930s

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Published : October 01st, 2012
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For some reason, I have the urge to work on this topic a little more. I made available the raw data here:

April 15, 2012: Foreign Exchange Rates 1914-1941

The basic story of this time period, 1920-1940 is something like this: A lot of currencies left the gold standard during WWI, including the U.S. to a small degree. Some then had hyperinflation in the early 1920s. During the mid-1920s, these currencies are repegged to gold. The Great Depression begins. I thought Germany was the first of the big countries to devalue in August of 1931, but it turns out that was wrong. Germany's government defaulted on its debt that month, and imposed heavy currency controls, but the currency was not (officially) devalued. Thus, Britain was the first of the big countries to devalue, in September 1931. Because the British pound was the world's premier international currency, much like the dollar is today, many countries followed Britain's lead and devalued simultaneously or soon after. Japan followed in December 1931, basically to return the yen exchange rate to its pre-devaluation level.

These are annual averages, which unfortunately do not capture some of these events well. The September 1931 devaluations, for example, get averaged into 1931, so the 1931 averages show only a slight decline for the full year. The U.S. devalues in 1933 of course, and repegs to gold in 1934 at $35/oz.

I suppose some of the points made here are that most countries devalued their currencies around the late 1931 timeframe, if not earlier in some instances. This put "beggar thy neighbor" trade pressures on all the non-devaluing countries. When the world's premier international currency, in this case the British pound, is devalued, usually there are a lot of copycats. The result is that nearly all countries also devalued, if only to restore exchange rates to somewhere near their pre-devaluation levels.

I'll have the remainder of the countries next week.


Argentina devalued alongside Britain in late 1931, and again in 1934.



Australia devalued in August 1931.

Austria devalued alongside the U.S. in 1933-34, but not to the same magnitude.

Belgium devalued alongside the U.S. in 1933-34, but not to the same magnitude.

Then as now, Brazil never had much committment to a stable currency.

British India followed the British pound, rising in value in the early 1920s and then devalued in September 1931.

Bulgaria maintained its currency value throughout the period.

Canada, not surprisingly, shows a combination of both the British and U.S. patterns, devaluing in September 1931 and again in 1933-34, although not the same magnitude in both cases.

Chile had several currency depreciation events.

China was on a silver standard, not a gold standard, and the value of the currency fell vs. gold as a result of the falling value of silver vs. gold. In the late 1930s, the currency was further devalued as the government printed money to pay for war with Japan.
This resulted in hyperinflation in the 1940s.

Nathan Lewis


(This item originally appeared at on September 30, 2012.)




Data and Statistics for these countries : Argentina | Australia | Austria | Belgium | Brazil | Bulgaria | Canada | Chile | China | Germany | India | Japan | All
Gold and Silver Prices for these countries : Argentina | Australia | Austria | Belgium | Brazil | Bulgaria | Canada | Chile | China | Germany | India | Japan | All
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Nathan Lewis was formerly the chief international economist of a firm that provided investment research for institutions. He now works for an asset management company based in New York. Lewis has written for the Financial Times, Asian Wall Street Journal, Japan Times, Pravda, and other publications. He has appeared on financial television in the United States, Japan, and the Middle East.
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