- It is the increase in the exchange rate of one currency in terms of other currencies.
- The term is usually applied to a currency with a floating rate of exchange; upward changes in fixed rate of exchange are called Revaluation.
- If currency appreciates, it becomes more expensive to buy that country's exports.
- This can cause a contraction in the economy, which can further impact the value of the currency.
Banking Term: Currency Appreciation
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