标题: Short-term (1-month) government rate [打印本页] 作者: bchadwick 时间: 2011-7-13 16:44 标题: Short-term (1-month) government rate
Curriculum volume 3, page 118, question 18.
Why would we expect to see a strengthing currency in UK since its Short-term (1-month) government rate is higher?
It looks to me that higher interest rate will make the currency depreciated, according to Interest Rate Parity.作者: wake2000 时间: 2011-7-13 16:44
high interest rate will attract capital that seeks here ROI, increasing demand for currency, which increases Fx. I think you're confused with inflation.作者: Unforseen 时间: 2011-7-13 16:44
This is from L2 (maybe L1 even). PPP only works in the long term.
