Question

2. What is the difference between a depreciation of the dollar and a devaluation of the dollar?

Answer 1

Essentially devaluation is changing the value of a currency in a fixed exchange rate. A depreciation is reducing the value in a floating exchange rate.

Answer 2

A devaluation occurs when a country makes a decision to lower its exchange rate in a fixed or semi-fixed exchange rate. A depreciation is when there is a fall in the value of a currency in a floating exchange rate.