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Interest Rate Parity Calculator

Finance

Calculate the forward exchange rate implied by covered interest rate parity, using the spot rate and the interest rates of both currencies.

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01,000,000
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1 day3,650 days
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-5%50%

Implied Forward Exchange Rate

0.17247

The forward rate that keeps returns equal across both currencies once interest rate differences are factored in

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Odeh Ahwal

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Odeh Ahwal
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Frequently Asked Questions

Why do interest rate differences affect forward exchange rates?

Covered interest rate parity holds that any interest rate advantage from holding one currency should be offset by an expected depreciation against the other, otherwise arbitrage would let traders profit risk-free.

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