| Foreign Interest Rates and Purchasing power?

Foreign Interest Rates and Purchasing power?

westphalia1 asked:


I have a new trading account in a foreign country (USD converted to their local currency). If the national interest (Short term rates) rate in this foreign country is 10.00% does this mean that each US dollar has a purchasing power of 10.00%? To purchase a product (or security) you could multiply your returns on investment (interest rate + exchange rate) by 10? Every US dollar placed within this country would grow exponentially by 10? Thank you.

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One Response to “Foreign Interest Rates and Purchasing power?”

  1. Joe on October 19th, 2009 12:11 am

    I would suggest not getting a trading account until you learn what these terms mean. Also never open a trading account in a foreign country. You may never get your money back.