WHY DOES AN INCREASE IN INTEREST RATES ATTRACT FOREIGN INVESTMENTS AND HOW DO INVESTORS PROFIT FROM THAT?

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denissnowy August 17, 2010 at 10:30 pm

increased interest rates mean a higher return on money in the bank as well as the currency gaining in value as a result of the influx of investment.

Investors profit if the hold assets denominated in the currency which will gain in value or if they hold assets which pay at interest rate plus X%.

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