<p>How can a country with a Current Account deficit can have an exchange rate appreciating and viceversa a Current Account surplus and a currency depreciating?</p>

CC BY-SA 4.0
2024-04-02T15:29:25.407Z
A country running a current account deficit is importing more than it is exporting. Hence, a current account deficit should cause the value of the domestic currency to fall. This will make exports cheaper and imports more expensive, balancing the current account.
Pavel Filip
CC BY-SA 4.0
2024-04-03T23:22:45.277Z
there are many examples of countries with CA deficit and FX appreciating , see just the US post covid with a stronger USD
FinanceStudent
CC BY-SA 4.0
2024-04-04T10:01:26.343Z
True. In fact, the U.S. has not run a current account surplus since about the 1980s, with a single spike during the 1990s.  https://tradingeconomics.com/united-states/current-account
Pavel Filip
<macroeconomics><international-economics><foreign-exchange>
Balance of Payment vs. FX rate
FinanceStudent
# Balance of Payment vs. FX rate

(Asked by: username_0 on 2024-04-02)

How can a country with a Current Account deficit can have an exchange rate appreciating and viceversa a Current Account surplus and a currency depreciating?

**Tags:** macroeconomics, international-economics, foreign-exchange
> **Comments:**
> **username_1**: A country running a current account deficit is importing more than it is exporting. Hence, a current account deficit should cause the value of the domestic currency to fall. This will make exports cheaper and imports more expensive, balancing the current account.  
> **username_0**: there are many examples of countries with CA deficit and FX appreciating , see just the US post covid with a stronger USD  
> **username_1**: True. In fact, the U.S. has not run a current account surplus since about the 1980s, with a single spike during the 1990s.  https://tradingeconomics.com/united-states/current-account  

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## 0 answers

