When a currency..


APPRECIATES: this simply means that a currency has increased in value relative to another currency. Let me explain. If for example, a ghana Cedi was exchanged to a Rand at a rate of 15 cedi to 1 rand as at last june and after six months, it began exchanging 10 cedi for 1 rand, the cedi currency is said to have APPRECIATED. The cedi has gained value to a Rand and therefore labelled strong!. A strong exchange rate.

DEPRECIATES: means a currency has weakened or fell in value relative to another currency. For example, in 2013, a Naira was exchanged to a Rand at the rate of N20 to 1 Rand, but in 2015, the same naira was excanged at the rate of N25 to 1 Rand. Therefore, the Naira currency is said to have DEPRECIATED. The Naira has lost value relative to a Rand and therefore labelled weak!. A weak exchange rate.



How does a currency Appreciate?
A currency simply appreciates when there is an increase in demand for that particular currency in the world market. A currency's increase in demand can occur for several reasons:

Continue reading in the link below and also know its effect in an economy...

http://afrieye..com/2015/12/meaning-and-effects-of-currency.html ignorance is not an excuse .