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

  • Basel Accord
    In Banking industry there are three sets of banking regulations to provide recommendations ...
  • Super NOWs
    Super NOWs is the savings accounts that usually promise a higher interest return than ...
  • Project Finance Loan Program
    Project Finance Loan Program refers to a program that allows banks, the Ex-Im Bank, or ...
  • Assignments
    Assignments is a form of loan sale in which ownership of a loan is transferred to the ...
  • Trade acceptance
    Trade acceptance refers to a draft that allows the buyer to obtain merchandise prior to ...