Describe how the prevailing interest rates in a country affect its exchange rates with the

currency of its major tradi

1 thought on “Describe how the prevailing interest rates in a country affect its exchange rates with the <br /><br />currency of its major tradi”

1. Explanation:

   Higher interest rates offer lenders in an economy a higher return relative to other countries. Therefore, higher interest rates attract foreign capital and cause the exchange rate to rise.

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