If interest rates are lowered, then the money supply expands. Banks lend more, and there is more money in circulation. When more money is chasing the same amount of goods and services, this causes inflation (a rise in prices). If the same goods and services cost more, this means that the currency is worth less. Thus, lower interest rates mean a currency that’s worth less, and higher interest rates increase the value of a currency, because they take dollars out of circulation (fewer dollars chasing the same amount of goods and services).