Economy, asked by jatin169, 1 year ago

difference between depreciation and devaluation of currency

Answers

Answered by himanimehta562
3
Depreciation and devaluation are two different economic term that actually deals with the cntry's currency value. Both currency depreciation currency devaluation end up with a currency that is worth less than it previously was in comparison to the currencies of other countries.
*depreciation*
Depreciation of the currency happens when the country follows a flexible exchange rate means that the value of a currency is determined by the demand and supply and the central bank does not intervene in it.
*Devaluation*
It happens in counties With fixed exchange rate. In a fixed exchange rate, central bank decides what should be the value of its currency compared to other countries. The central bank intervenes by buying or selling government securities to keep its exchange rates fixed.

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