All Questions
Tagged with foreign-exchange interest-rate
7 questions
5
votes
2
answers
287
views
How does raising the Russian interest rate defend the Ruble from devaluation?
Raising interest rates to minimize currency devaluation is being adopted in countries like Brazil and Russia:
Brazilian interest rate
Russian interest rate
How does raising the interest rate ...
- 171
2
votes
2
answers
222
views
How does interest rate impact exchange rate?
When I’m using the forward exchange rate formula based on non-arbitrage theory, it tells me that a positive interest rate spread (i_domestic > i_foreign)would cause the forward exchange rate(units of ...
0
votes
1
answer
79
views
Why people buy foreign bonds when foreign interest rate raises?
I'm reading Investopedia's How National Interest Rates Affect Currency Values and Exchange Rates to understand how interest rates affect exchange rates.
It says:
Generally, higher interest rates ...
- 153
0
votes
1
answer
41
views
Dynamics of interest rates, exchange rates and bond prices within the UIP
There are already a few questions about the workings of the UIP and the exchange rate. What I have basically taken from those discussions is that one always has to distinguish between the spot rate ...
- 25
0
votes
1
answer
64
views
How would one arbitrage a mispricing in interest rates and forex rates?
If you have a Japanese bond with a return of 2%, and an American bond paying 5%, but both current and forward exchange rates are 100 yen to 1 usd, how would one take advantage of this opportunity to ...
- 69
0
votes
1
answer
71
views
Why does the dollar seem weak?
2:00 (GMT+8) - The FED raised interest rates at 0.75-percentage-point (75 basis points I believe, not sure with terminology but definitely now at 1.75%). But even so, why does the USD seem weaker? I ...
0
votes
1
answer
33
views
How does exchange rate change with respect to interests?
If the central bank raises intereat rates, isn't the money supply now less and the exchange rate is greater? I have run into opposite statements and dont know how to approach this problem.
Thanks in ...
- 1