Written by the Fiveable Content Team • Last updated September 2025
Written by the Fiveable Content Team • Last updated September 2025
Definition
An exchange rate is the value of one currency for the purpose of conversion to another. It determines how much of one currency you can get with a certain amount of another currency.
Related terms
Currency Appreciation: An increase in the value of one currency in terms of another.
Inflation: The rate at which the general level of prices for goods and services is rising, eroding purchasing power.
Bretton Woods Institutions: International organizations (IMF and World Bank) established to help manage economic cooperation globally and stabilize currencies after World War II