Reply and respond are interchangeable when used as verbs...e.g. Why do you always reply so negatively? Why do you always respond so negatively? However, reply is also a noun, whereas respond cannot be used as a noun (you would use 'response' instead) e.g. His reply was unsatisfactory / His response was favourable...

Just to add to what Jane has said: another difference is that 'reply' is always verbal, whereas 'respond' and the noun ' a response' is much more general in meaning.

They can be interchangeable. But .... "to reply" usually means with words. "to respond" can mean either words or action.

I agree with Jane. I disagree with Su; a reply is not specifically verbal.