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YOTA691-Currency appreciation and depreciation

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Post by Ponee on Tue Jan 19, 2016 11:17 am

Why does a currency appreciate?

A currency appreciates as a result of increased demand for that currency on world markets: its value in the world market increases. This increase in demand can occur for several reasons: When a country's exports are high, the buyers of these exports need its currency to pay for those exports.

and the flip side...

What does it mean when a currency depreciates?
Currency depreciation is the loss of value of a country's currency with respect to one or more foreign reference currencies, typically in a floating exchange rate system.

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