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Interest rate parity

The Influence of Interest Rate Parity on Exchange Rates

November 22, 2023

How does interest rate parity affect foreign exchange markets?

Interest rate parity is a theory stating that interest rate differentials between two currencies will be offset by changes in the exchange rate over time. This theory influences currency movements, suggesting that changes in interest rates can impact exchange rates to maintain parity between currencies.

Tags : Interest Rate Parity , Exchange Rates , Foreign Exchange Markets

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