Abstract: Net output effect of devaluation at microeconomic level for the soap industry in Chittagong, Bangladesh has been estimated in this paper. The study found that imported-input dependent soap industry responded negatively with devaluation. The estimated net output response coefficient of the washing soap industry following devaluation was –0.75 suggesting that ill-judged devaluation in a developing country where industrial structure is import based can have unpalatable consequences in terms of employment and income distribution.