Devaluation and depreciation of currency. Are they same???

When the value of currency decreases, people often get confused between devaluation and depreciation. But what is the difference? Is the value of currency really important to be a developed nation?

Devaluation:- Devaluation is the deliberate downward adjustment of the value of a country's money relative to another currency or currency standard. It is done deliberately to reduce the export costs and shrink trade. It also helps in paying debts by printing of more notes which also decreases the value of money.Unlike depreciation, it is not the result of nongovernmental activities. This is often done to render themselves more efficient in the global market and gain better foreign investments by offering a low labour cost to the foreign companies. A export oriented country would always prefer to stay more committed towards a lower currency value as cheaper costs would attract more investors.

Depreciation:- Currency depreciation is a fall in the value of a currency in a floating exchange rate system. This could often occur due to poor fundamentals of economy such as a decrease in the Foreign Direct Investment (FDI) , political instability, interest rate differentials, risk aversion, etc. Currency depreciation in one country could sometimes spread to other countries too. High rates of inflation could also be a factor for money depreciation. Currency depreciation, if orderly and gradual, improves a nation’s export competitiveness and may improve its trade deficit over time. But an abrupt and sizable currency depreciation may scare foreign investors who fear the currency may fall further, leading them to pull portfolio investments out of the country.

However do you really think that this value of the currency is directly proportional to economic development?

Countries like Japan have very low value of value of currency with 109 yen required to make up one dollar and 1.50 yen making up 1 rupee. But does it mean they are not developed? Of course not. Hence the price of the currency is more relatively to the exports and imports of the country where a export oriented countries prefers to have a low currency value for selling products by attracting trades at lower cost, while an export oriented prefers to have less.

But in the case of India you might feel, 'Why are we having a high currency value while we remain as a import oriented country in actual?' This is because a majority of our employment comes from the export oriented jobs.