Exchange Rate Overshooting
Exchange-rate overshooting occurs when a currency moves beyond its long-run value after shocks to money, rates, or expectations.
Misalignment, overshooting, revaluation, and realignment terms used when exchange rates diverge from fundamentals.
Exchange-Rate Misalignment and Realignment explains exchange-rate measures, real and nominal currency values, currency regimes, pegs, floats, convertibility, devaluation, monetary standards, and capital controls used in finance.
Use these pages when currency movements, exchange-rate measurement, cross-border cash flows, country risk, or balance-of-payments pressure affects a finance decision. It sits inside Currency Valuation, Devaluation, and Realignment, so readers can move up when the broader economics context matters.
Use the table below to choose the narrower economics branch before applying a term to a model, credit view, market interpretation, policy conclusion, or risk review. Move into the term page when the evidence source, calculation, institution, market convention, or risk exposure matters.
| Area | Use it for |
|---|---|
| Exchange Rate Overshooting | Exchange-rate overshooting occurs when a currency moves beyond its long-run value after shocks to money, rates, or expectations. |
| Misaligned Exchange Rate | A misaligned exchange rate refers to an exchange rate that is inconsistent with a satisfactory balance of payments. |
| Over-Valued Currency | An over-valued currency trades above levels implied by fundamentals, purchasing power, external balances, or policy targets. |
| Realignment of Exchange Rates | Realignment of exchange rates resets currency parities, bands, or reference values to reflect policy or market pressures. |
| Revalorization of Currency | Revalorization of currency is the process whereby one currency unit is replaced by another. |
| Under-Valued Currency | An under-valued currency trades below levels implied by fundamentals, purchasing power, external balances, or policy targets. |
Currency explanations are educational and do not recommend a trade, hedge, transfer, or country allocation.
Choose a subsection first. Deeper term pages live inside each subsection, which keeps large topic hubs readable.
Exchange-rate overshooting occurs when a currency moves beyond its long-run value after shocks to money, rates, or expectations.
A misaligned exchange rate refers to an exchange rate that is inconsistent with a satisfactory balance of payments.
An over-valued currency trades above levels implied by fundamentals, purchasing power, external balances, or policy targets.
Realignment of exchange rates resets currency parities, bands, or reference values to reflect policy or market pressures.
Revalorization of currency is the process whereby one currency unit is replaced by another.
An under-valued currency trades below levels implied by fundamentals, purchasing power, external balances, or policy targets.