Appreciation of Currency Vs. Revaluation of Currency

Appreciation of currency means increase in the value of one country’s currency in comparison to other country’s currency due to market forces (demand & supply).

Example:-

In floating/Flexible Exchange Rate Regime:- 1$ = 70, if $ rate decreases from 70 to 60. Here, value of India’s currency will be increased or price of foreign exchange will be decreased.

Revaluation of Currency :- means increase in the value of one country’s currency in comparison to other country’s currency due to Government intervention or by monetary authority (Central bank).

In fixed/Pegged Exchange Rate Regime :- 1$ = 70, if $ rate decreases from 70 to 60. Here, the value of India’s currency will be increased or price of foreign exchange will be decreased.

Import becomes cheap.

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