I understand how changes in interest rates affect the demand for currency (i.e. foreign exchange), but was wondering whether there is also an effect on its supply. I am hypothesising the following: high interest rates -> lower MPC -> people spend less on imports -> will supply fewer domestic currency in exchange for foreign currency -> reduces supply of currency in the FX market. Does such a hypothesis sound at all credible? Is there another way in which the interest rates can affect the supply of a currency?