Interest rate parity is a theory which states that exchange rates adjust so that identical goods cost the same amount regardless of where in the world they are purchased.

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Interest rate parity is a financial theory which posits that the difference in interest rates between two countries is equal to the expected change in exchange rates between those countries' currencies. It does not directly relate to the cost of identical goods in different countries; that concept is more closely associated with purchasing power parity.

Interest Rate Parity Is a Theory Which States That Exchange