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Why does a currency increase in value?

A currency's value increases for various reasons, including changes in governments' monetary and fiscal policies, interest rates, trade balances, and business cycles. Currency appreciation refers to the increase in value of one currency relative to another in forex markets.

What does appreciation of currency mean?

Appreciation of currency refers to the increase in the value of a country’s currency in relation to other currencies over a period of time. It signifies that the currency now has a higher value compared to other currencies, making imports cheaper and exports relatively more expensive.

How to increase the value of currency in the long-term?

To increase the value of the currency in the long-term, the government will need to try supply-side policies to increase competitiveness and cut costs of production, for example, privatisation and cutting regulations may help the export industry become more competitive in the long-term.

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