Trade · 6 pages · 12 min
How devaluation differs from depreciation
Devaluation is an official cut in a pegged rate, while depreciation is a fall in the market price.
When the purchase is complete, return to the original window. It will refresh.
From the opening
A devaluation happens when the authority that pegs a currency announces a new, weaker official rate against the anchor. A depreciation happens when the currency's market price falls without that official reset. The opening covers devaluation changes the official peg, depreciation is a market fall, and a float has no parity to cut.
The rest of the brief — the later sections and the reading notes — opens after Stripe confirms payment.
Inside
- Devaluation changes the official peg
- Depreciation is a market fall
- A float has no parity to cut
- The two moves can come in sequence
- Where the idea stops applying
- A distinction worth keeping
Sources
- Official devaluation of a peg
- Market depreciation under a float