A currency trading situation whereby the value of a currency is higher than the open market accepts at the current exchange rate. Often a central bank of the originating country will increase demand through the purchase of the local currency, thereby tightening supply.

A situation in which the exchange rate of a currency exceeds what the open market is willing to pay. For example, currency overvaluation may occur when central banksbuy more of a currency that they ordinarily do when other trading is flat. Currency overvaluation makes a country's exports more expensive and may thus be detrimental tointernational trade