Definition

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:  Cite

More from this Section

  • Limited-payment life insurance
    Limited-payment life insurance refers whole life insurance that distributes over a fixed ...
  • Package policy
    Package policy that combines two or more separate contracts of insurance in one policy, ...
  • Bank profitability
    Bank profitability is an important indicator of bank performance, it represents the rate ...
  • Particular average
    Particular average is an ocean marine loss that falls entirely on a particular interest ...
  • Multiple-line insurance
    Multiple-line insurance is a type of insurance that combines several lines of insurance ...