Intro/General definitions

Question 1

What is the bilateral exchange rate?

Answer 1

the rate of exchange of one single currency for another single currency

Question 2

What is the effective exchange rate/trade weighted exchange rate index?

Answer 2

measure of the exchange rate of a currency’s, usually against a basket of currencies of a countries major trading partners

Question 3

What is depreciation of exchange rate?

Answer 3

Fall in value of currency in terms of other countries due to market forces

Question 4

What appreciation of exchange rate?

Answer 4

Rise in value of currency in terms of other currencies due to market forces

Question 5

What is devaluation of exchange rate?

Answer 5

Fall in value of currency in terms of other currencies due to the policy of a government or central bank

Question 6

What is revaluation of exchange rate?

Answer 6

Rise in value of a currency in terms of other currencies due to the policy of a government or central bank