Depreciation and Devaluation both imply a fall in external value of currency. However, the term depreciation is used under the floating exchange rate system, that is when the exchange rate system is determined by the combined market forces of demand and supply. A currency loses or gains value because of fluctuations in demand and supply
The term Devaluation is used in a system of fixed exchange rates. in this system, the exchange value of ac currency is decided by the government. Devaluation of currency is the deliberate action of the government
Deprecation and Devaluation of a currency normally encourages exports from a country as exports becomes cheaper for the foreign nationals and foreign currency can how buy more of domestic goods , i.e. the international competitiveness of the goods and services of such a nation gets better.
