Currency depreciation is the decline in a nation’s currency value relative to others. The opposite of currency depreciation is currency appreciation, where a currency becomes stronger.
Facts to Know
- Easy monetary policy and high inflation can lead to currency depreciation, affecting a country’s trade and investment.
- Controlled depreciation might benefit a country’s export competitiveness.
- Political actions and rhetoric, such as trade disputes and tariffs, can also influence currency value.
Effects
- Exports will become cheaper and export will be more competitive in foreign markets.
- Imports will become more expensive from the country.
Source: The Indian Express