The incentives for exports boosts exports for the country. As a result of increase in exports the supply of foreign currency in the country increases. With demand remaining the same this results in a fall in the exchange rate implying currency appreciation. This can be explained diagrammatically as follows,With the rise in exports the supply of foreign currency increases. In the diagram $D D$ and $S S$ are the initial demand curve and supply curve for foreign currency respectively. $E$ is the initial equilibrium point, with $O R$ as the equilibrium exchange rate. Rise in the supply of foreign currency would shift the supply curve from $S S$ to S'S'. With the shift in supply curve, the new equilibrium is established at point $E'$, where the exchange rate falls from $O R$ to $O R_{1}$ and the demand and supply of foreign currency rises to $O Q_{2}$. This represents a case of currency appreciation.