Answer:
Increase, depreciate
Step-by-step explanation:
Currency depreciation can be defined as a fall in the value of a currency in a floating exchange rate system. Currency depreciation can occur due to the following factors: economic fundamentals, interest rate differentials, political instability or risk aversion among investors.
Countries that have weak economic fundamentals such as chronic current account deficits and high rates of inflation generally tend to have depreciating currencies. Currency depreciation, if orderly and gradual have the tendency to improve a nation’s export competitiveness and its trade deficit over a period of time.
