請教Econ- Currency Exchange (interest rate vs currency appreciation) currency, interest, equation, domestic, contrast

早晨繁星

拷貝from Macro Econ lvl 1 第五百页。。。

All else being equal, an increase in domestic interest rates (for example, the central bank tightens monetary policy) would typically be expected to lead to an increase in the value of the domestic currency.

In contrast, the equation （f/d quoting convention） indicates that, all else equal, a higher domestic interest rate implies slower expected appreciation (or greater expected depreciation) of the domestic currency.


so increase in domestic interest rates will cause domestic currency to appreciate or depreciate ?! Helps TT

lawkm223

domestic int rate increase=>foreign investors found the investment is attractive=>demand for domestic currency increase=>currency appreciate

apf_薛老师

higher domestic interest rate will lead to appreciation of domestic currency