Depreciation is an ongoing decrease in the value of a currency caused by dovish financial policies, a weakening economy, or even a surge in imports. This currency depreciation is viewed in terms of its exchange rate versus other currencies on the forex market.
How to calculate depreciation
To calculate the percent change of depreciation, subtract the currency’s current value from its earlier value, then divide that figure by the current value. Multiply this figure by 100 to get a negative percentage, which is the depreciation to that point.
A formula to calculate depreciation is ((V1-V2)/V2) x 100 = percent change.