Explore the theory of uncovered interest rate parity (UIP), understand its formula, and discover how it links interest rates to currency exchange rate expectations.

After Japan’s bubble economy burst in the late 1980s and interest rates were subsequently slashed, carry trades and overseas investment boomed. As the Bank of Japan starts to raise Japan’s ...

Learn how floating exchange rates work, driven by forex market supply and demand, and compare with fixed rates to grasp their impact on global economies.

Download PDF More Formats on IMF eLibrary Order a Print Copy Create Citation Growing remittance flows to emerging and developing economies may lead to real exchange rate appreciation and weaken their ...