Appreciated
Definition
Appreciated means an increase in the value of an asset over time. In finance, this often refers to the rise in value of a currency compared to other currencies.
5 Must Know Facts For Your Next Test
- Currency appreciation can affect international trade by making exports more expensive and imports cheaper.
- When a currency appreciates, it can lead to a decrease in inflation as import prices drop.
- Appreciation of a currency might result from higher interest rates, which attract foreign investors seeking better returns.
- A positively appreciated currency can impact multinational companies' earnings as their foreign revenues translate into fewer home-country dollars.
- Currency appreciation can reduce the cost of repaying foreign-denominated debt.
Review Questions
- How does the appreciation of a currency impact international trade?
- What are some factors that can cause a currency to appreciate?
- How does currency appreciation affect multinational companies?
"Appreciated" appears in:
Study guides (1)
Related terms
Depreciated: A decrease in the value of an asset or currency over time.
Exchange Rate: The rate at which one currency can be exchanged for another.
Interest Rate Parity: A theory stating that differential interest rates between two countries are equal to the differential between forward exchange rates and spot exchange rates.
