Okuzeka
Economics vocabulary · Trade and Exchange Rates

Depreciation

Meaning in economics, with examples

/dɪˌpriːʃiˈeɪʃn/nounCommon term

In economics, depreciation means: A fall in the value of a currency against other currencies under a floating exchange rate, driven by market forces rather than an official decision.

In Turkish: değer kaybı

How it is used

The news says a currency depreciated by 10% against the dollar, or reports a sharp depreciation of the lira. The opposite is appreciation. Depreciation makes imports dearer and exports cheaper. In accounting, depreciation means the falling value of assets over time.

Example sentences

  1. The depreciation of the currency pushed up the price of imported medicine.

  2. A 20% depreciation against the euro made the country's hotels much cheaper for European tourists.

Common collocations

  • currency depreciation
  • a sharp depreciation
  • depreciation against the dollar
  • real depreciation
  • devaluationAn official decision by a government or central bank to lower the value of its currency under a fixed or pegged exchange rate.
  • exchange rateThe price of one currency expressed in another, for example how many Turkish lira you need to buy one US dollar or one euro.
  • importA good or service bought from producers in another country; as a verb, to bring goods or services in from abroad.
  • exportA good or service sold to buyers in another country; as a verb, to sell goods or services abroad.
  • inflationA general and continuing rise in the prices of goods and services in an economy, which means each unit of money buys less over time.

This word in other fields

The same English word can have a different meaning in another field:

More terms: Trade and Exchange Rates

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This page explains English vocabulary for learners. It is not financial advice.