diff --git a/app/client/src/widgets/CurrencyInputWidget/widget/index.test.tsx b/app/client/src/widgets/CurrencyInputWidget/widget/index.test.tsx
index 4929104b0e1f..159f8620097f 100644
--- a/app/client/src/widgets/CurrencyInputWidget/widget/index.test.tsx
+++ b/app/client/src/widgets/CurrencyInputWidget/widget/index.test.tsx
@@ -38,6 +38,32 @@ describe("defaultValueValidation", () => {
     });
   });
 
+  it("should preserve decimal precision for valid string defaults", () => {
+    result = defaultValueValidation(
+      "123.00",
+      { decimals: 2 } as CurrencyInputWidgetProps,
+      _,
+    );
+
+    expect(result).toEqual({
+      isValid: true,
+      parsed: "123.00",
+      messages: [{ name: "", message: "" }],
+    });
+
+    result = defaultValueValidation(
+      "4.10",
+      { decimals: 2 } as CurrencyInputWidgetProps,
+      _,
+    );
+
+    expect(result).toEqual({
+      isValid: true,
+      parsed: "4.10",
+      messages: [{ name: "", message: "" }],
+    });
+  });
+
   it("should validate defaulttext with object value", () => {
     const value = {};
 
diff --git a/app/client/src/widgets/CurrencyInputWidget/widget/index.tsx b/app/client/src/widgets/CurrencyInputWidget/widget/index.tsx
index d622578540d6..f5ce0c7c0fce 100644
--- a/app/client/src/widgets/CurrencyInputWidget/widget/index.tsx
+++ b/app/client/src/widgets/CurrencyInputWidget/widget/index.tsx
@@ -77,6 +77,22 @@ export function defaultValueValidation(
   const decimalSeperator = getLocaleDecimalSeperator();
   const defaultDecimalSeperator = ".";
 
+  const getParsedString = (parsedValue: number) => {
+    if (!_.isString(value)) {
+      return String(parsedValue);
+    }
+
+    const trimmedValue = value.trim();
+
+    if (!trimmedValue.includes(defaultDecimalSeperator)) {
+      return String(parsedValue);
+    }
+
+    const [, fractionalPart = ""] = trimmedValue.split(defaultDecimalSeperator);
+
+    return parsedValue.toFixed(fractionalPart.length);
+  };
+
   if (_.isObject(value)) {
     return {
       isValid: false,
@@ -144,7 +160,7 @@ export function defaultValueValidation(
       messages = [EMPTY_ERROR_MESSAGE];
     }
 
-    parsed = String(parsed);
+    parsed = getParsedString(parsed);
   }
 
   return {
diff --git a/app/client/src/widgets/wds/WDSCurrencyInputWidget/config/propertyPaneConfig/validations/defaultValueValidation.ts b/app/client/src/widgets/wds/WDSCurrencyInputWidget/config/propertyPaneConfig/validations/defaultValueValidation.ts
index 68041c230e9c..9fa3b8d967b9 100644
--- a/app/client/src/widgets/wds/WDSCurrencyInputWidget/config/propertyPaneConfig/validations/defaultValueValidation.ts
+++ b/app/client/src/widgets/wds/WDSCurrencyInputWidget/config/propertyPaneConfig/validations/defaultValueValidation.ts
@@ -33,6 +33,22 @@ export function defaultValueValidation(
   const decimalSeperator = getLocaleDecimalSeperator();
   const defaultDecimalSeperator = ".";
 
+  const getParsedString = (parsedValue: number) => {
+    if (!_.isString(value)) {
+      return String(parsedValue);
+    }
+
+    const trimmedValue = value.trim();
+
+    if (!trimmedValue.includes(defaultDecimalSeperator)) {
+      return String(parsedValue);
+    }
+
+    const [, fractionalPart = ""] = trimmedValue.split(defaultDecimalSeperator);
+
+    return parsedValue.toFixed(fractionalPart.length);
+  };
+
   if (_.isObject(value)) {
     return {
       isValid: false,
@@ -100,7 +116,7 @@ export function defaultValueValidation(
       messages = [EMPTY_ERROR_MESSAGE];
     }
 
-    parsed = String(parsed);
+    parsed = getParsedString(parsed);
   }
 
   return {
diff --git a/app/client/src/widgets/wds/WDSCurrencyInputWidget/widget/index.test.tsx b/app/client/src/widgets/wds/WDSCurrencyInputWidget/widget/index.test.tsx
index 3110aebc4f24..f8e33f1cb744 100644
--- a/app/client/src/widgets/wds/WDSCurrencyInputWidget/widget/index.test.tsx
+++ b/app/client/src/widgets/wds/WDSCurrencyInputWidget/widget/index.test.tsx
@@ -38,6 +38,32 @@ describe("defaultValueValidation", () => {
     });
   });
 
+  it("should preserve decimal precision for valid string defaults", () => {
+    result = defaultValueValidation(
+      "123.00",
+      { decimals: 2 } as CurrencyInputWidgetProps,
+      _,
+    );
+
+    expect(result).toEqual({
+      isValid: true,
+      parsed: "123.00",
+      messages: [{ name: "", message: "" }],
+    });
+
+    result = defaultValueValidation(
+      "4.10",
+      { decimals: 2 } as CurrencyInputWidgetProps,
+      _,
+    );
+
+    expect(result).toEqual({
+      isValid: true,
+      parsed: "4.10",
+      messages: [{ name: "", message: "" }],
+    });
+  });
+
   it("should validate defaulttext with object value", () => {
     const value = {};