Other conditions remaining same which of the following is to be the most likely impact of reduction ...........

Economic Affairs Balance of Payments

Other conditions remaining same, which of the following is to be the most likely impact of reduction of interest rate by the central bank on value of currency against foreign currencies?

Appreciation

Depreciation

No impact

Nothing can be said with certainty

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Explanation:

Changes in interest rates affect the public's demand for goods and services and, thus, aggregate investment spending. A decrease in interest rates lowers the cost of borrowing, which encourages businesses to increase investment spending.
Appreciation is an increase in the value of an asset over time. The increase can occur for a number of reasons, including increased demand or weakening supply, or as a result of changes in inflation or interest rates. This is the opposite of depreciation, which is a decrease over time.