Appreciation
Definition. Appreciation is a rise in the value of a currency against another currency under a floating or managed float exchange rate system, caused by market forces of demand and supply for the currency. One unit of the domestic currency then exchanges for more units of foreign currency.
It tends to make exports more expensive abroad and imports cheaper at home. In Singapore the central bank can engineer appreciation by managing the trade weighted exchange rate.
This term belongs to Exchange Rate Policy in A Level Economics. Read the full chapter for the diagrams, worked examples and exam technique.
Want to use appreciation for marks in the exam? Learn it in class or message the team.