Write short notes on the following:
Distinction between Depreciation and Devaluation. 

Depreciation vs. Devaluation. Devaluation means decrease in price of domestic currency in relation to foreign currency by the government. This happens w'hen exchange rate is not determined by forces of demand and supply. Thus when govt, of a country officially lowers the value of its currency in terms of foreign currency, it is called devaluation. Depreciation is fall in value of domestic currency when exchange rate is freely determined by forces of demand and supply. The effect of depreciation is the same as that of devaluation. Although both depreciation and devaluation mean the same thing, i.e., a fall in the value of domestic currency in terms of foreign currency yet the notable difference between the two is that devaluation takes place in Fixed Exchange Rate regime whereas depreciation occurs in Flexible Exchange Rate regime in a free exchage market.