Economy, asked by Nishant9361, 1 year ago

Distinguish between devaluation and depreciation of currency

Answers

Answered by PoojaBurra
0

It occurs in a country's when monetary policy authority intentionally lessens value of its currency by lowering exchange rate as compared to other country's rate.

Authority devalues currency by lowering fixed exchange rate in international market.

Its changed by only country's authority and comparing worth of goods and services in international market.

It helps economy in that short period.

There's no fixed time for devalue currency but when need occurs or authority think there is need to devalue currency it happens.

Depreciation of currency happens by forces of demand and supply in global market not by government.

By depreciating value of currency the problem happens only for short time but in a long time and it helps an economy to build nicely and reliable.

Floating exchange rate is rate by which any country confirms value of their own currency in global market.

It happens in global market on daily basis because change in economic policy/political party in global market.

Depreciation purchasing power of currency falls as compared to other country's currency means country's money has less power to purchase.

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