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What is the meaning of currency appreciation and depreciation?

April 26, 2017appreciation currency depreciation

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What is the meaning of currency appreciation and depreciation?

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Suppose today we have rate INR 43/USD, when we say rupee is appreciating against US Dollar then the value of rupee may be INR 42/USD or anything less then INR 43/USD. It means now we can buy 100 USD in INR 4200 instead of INR 4300, so we are paying less. Now suppose today we have rate INR 43/USD, when we say rupee is depreciating against US Dollar then the value of rupee may be INR 44/USD or anything more then INR 43/USD. It means now we can buy 100 USD in INR 4400 instead of INR 4300, so we are paying more.