Devaluation of Currency: Currency devaluation takes place when one country’s currency is reduced in value in comparison to other currencies. After currency devaluation, more of the devalued currency is required in order to purchase the same amount of other currencies.
For a currency to be devalued means that the issuing government has mandated that the price of the currency (in foreign dollars) is lower than it was before.
Depreciation of Currency: A decline in the value of one currency relative to another currency. Depreciation occurs when, because of a change in exchange rates, a unit of one currency buys fewer units of another currency.
The deprecation of currency is made in order to promote exports and discourage imports, as when a currency is depreciated exports become cheaper because while imports become more expensive.
