Definition Of

Measuring Exchange Rate

An exchange rate measures the value of one currency in units of another currency. As economic conditions change, exchange rates can change substantially. A decline in a currency’s value is often referred to as depreciation. When the British pound depreciates against the U.S. dollar, this means that the U.S dollar is strengthening relative to the pound. The increase in a currency value is often referred to as appreciation.

Share it:

More from this Section

  • Undivided profits
    Undivided profits is the type of bank capital representing the net earnings of bank that have been retained in the business rather than being paid out as dividends to the bank’s stockholders.
  • Predatory lending
    Predatory lending is the granting loans to weaker borrowers and charging them excessive fees and interest rates, increasing the risk of their defaulting on loans.
  • Current Accounts
    A Current Account at a bank is the account by which a customer (most of businessman) is able to maintain a higher number of...
  • Bid/Bond Guarantee
    Bid/Bond Guarantee is a guarantee issued by a bank on behalf of a seller to a buyer to support the sellers’ bid or tender for a contract. If the
  • Stripped bonds
    Stripped bonds refer to those bonds that are issued by investment bankers against coupons or the maturity (corpus) portion of original bearer bonds ...
  • Standby Letter of Credit
    Standby Letter of Credit is a form of guarantee such as a demand guarantee. Used as security for a contingent event i.e. an importer failing
  • Margin
    Margin is a part of the value of security, which is not given as a loan by the bank or financial institution.