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Exchange Rate
The value of a currency expressed in terms of another currecny.
Floating Exchange Rate System
When exchange rates are determined by the market forces of demand and supply.
Appreciation
An increase in the value of a currency in a floating exchange rate system.
Depreciation
A fall in the value of a currency in a floating exchange rate system.
Fixed Exchange Rate System
Exchange rates are fixed by the central bank of each country at a particular level (or narrow range), and are not permitted to change freely in response to changes in currency supply and demand.