<p>If an American company received FDI from a foreign investor, that investor would need to buy USD to proceed with their investment,.</p>
<p>This would increase the demand for USD and hence raise its value/exchange rate against other currencies.</p>

CC BY-SA 4.0
2023-04-09T14:08:11.920Z
2023-04-09T14:08:11.920Z
Nicolas Torres
<p>I'm now studying about international trade and policy. I've known that higher interest rate would attract foreign investment therefore the demand for domestic's currency gone up and increase the value of the domestic currency. But I'm wonder would an increase in FDI increase the value of the local currency?</p>

<currency><money><investment>
Do an increase in foreign investment increase the value of domestic currency?
Ecoman
# Do an increase in foreign investment increase the value of domestic currency?

(Asked by: username_0 on 2023-04-09)

I'm now studying about international trade and policy. I've known that higher interest rate would attract foreign investment therefore the demand for domestic's currency gone up and increase the value of the domestic currency. But I'm wonder would an increase in FDI increase the value of the local currency?

**Tags:** currency, money, investment


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## 1 answers

### Answer by username_1 on 2023-04-09. Score: 1 | Accepted answer

If an American company received FDI from a foreign investor, that investor would need to buy USD to proceed with their investment,.

This would increase the demand for USD and hence raise its value/exchange rate against other currencies.


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