Glossary · Macro · Open economy

Appreciation

A rise in a currency’s price in terms of others, so each dollar buys more euros. It makes imports cheaper for residents and exports pricier for foreigners, which tends to push net exports down.

Also called: strong currency

Watch it happen step by stepTaught in: Trade & Exchange Rates

Related terms

DepreciationExchange rateWhat moves exchange rates

More from open economy

Balance of paymentsCapital and financial accountCurrent accountFixed vs floating exchange ratesImpossible trinityJ-curve

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