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If a country wants to devalue their countries, why does buying more of a foreign countries currency devalue their currency?

I was reading the top answer from this question How does a country devalue its currency? and it states that buying more of a foreign currency will increase the supply of the yuan. Why and how is that?

Christopher U
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Simply because buying country A's currency priced in country B's currency means selling country B's currency.

Simplified but not simplistic example: say that you have 80¥ and want to buy 10€. When buying/demanding these 10€, you will actually simultaneoualy also sell 80¥ i.e. by doing so you become a supplier of (€-priced) yuans. And because selling an asset generally exerts a downward pressure on its price, the price of 1¥ expressed in euros will decrease. Hence the explanation you read.

keepAlive
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  • Any question @ChristopherU ? – keepAlive Aug 26 '19 at 20:42
  • Could you just quickly explain the last part (And because selling an asset generally exerts a downward pressure on its price, the price of 1¥ expressed in euros will decrease), I don't really get that? Thanks! – Christopher U Aug 31 '19 at 01:55
  • @ChristopherU : 1) If I have 1¥ and that I want to sell it, I have "to find someone" who wants to buy it. It is very likely that I will find someone who will tell me : "I can buy it from you, but sell it cheaper (in euro), otherwise I'll buy it elsewhere". Given that I may not be the only seller on the market, I will accept the transaction price and sell it cheaper than I first expected. 2) By using the word "generally", I mean that I may have found someone who is okay to buy it at the current price without negocation, which will not lead to a decrease in price, not very common though. – keepAlive Aug 31 '19 at 20:29
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In easy words it will increase the supply of the currency in the international market and thus devaluation will happen because demand will be same. International market is a free trade economy where currencies value change because of the forces of supply and demand

Satyam Kumar Tiwari
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