Currency appreciation and depreciation

For the accounting term, see Depreciation.

Foreign exchange
Exchange rates
Markets
Assets
Historical agreements
See also
William Huskisson, Question concerning the depreciation of our currency, 1810

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 in which no official currency value is maintained. Currency appreciation in the same context is an increase in the value of the currency. Short-term changes in the value of a currency are reflected in changes in the exchange rate.[1][2][3][4]

There is no optimal value for a currency.[5] High and low values have tradeoffs, along with distributional consequences for different groups.[6][5]

  1. ^ "The Impact of falling exchange rate | Economics Help". www.economicshelp.org. Retrieved July 11, 2016.
  2. ^ Krugman, Paul. "International Economics - Theory and Policy - Chapter 13 - Exchange Ratesand the ForeignExchange Market: An Asset Approach" (PDF). eml.berkeley.edu.
  3. ^ "Currency Appreciation and Depreciation | Encyclopedia.com". www.encyclopedia.com. Retrieved May 30, 2020.
  4. ^ "currency appreciation". TheFreeDictionary.com. Retrieved May 30, 2020.
  5. ^ a b Frieden, Jeffry (2008). "Globalization and exchange rate policy". In Zedillo, Ernesto (ed.). The Future of Globalization. Routledge. doi:10.4324/9780203946527. ISBN 978-0-203-94652-7. Archived from the original on January 3, 2022. Retrieved January 3, 2022.
  6. ^ Broz, J. Lawrence; Frieden, Jeffry A. (2001). "The Political Economy of International Monetary Relations". Annual Review of Political Science. 4 (1): 317–343. doi:10.1146/annurev.polisci.4.1.317. ISSN 1094-2939.