Depreciation
When a currency loses value against others because of market forces, so each unit buys less.
In plain English
When a currency loses value against others because of market forces, so each unit buys less.
Depreciation is a currency getting weaker in the market. If the yen depreciates against the dollar, it takes more yen to buy one dollar, and USD/JPY rises.
It is driven by supply and demand: falling interest rates, weak data or fear can all push it. When a government deliberately lowers a fixed rate, that is devaluation instead. The opposite is appreciation. (In accounting, depreciation also means writing down the value of equipment over time.)
Keep this word for good
Your free Private Swap Lounge saves the terms you’ve learned and quizzes you on them. Portal under construction. Expected delivery date is December 01, 2026.