If a foreign currency consistently depreciated against the pound over several periods and had lower interest rates at the beginning of those periods than the UK interest rates, then:

Question

Quizplus · Accepted Answer

The depreciation of the foreign currency and lower interest rates compared to the UK would not result in a higher effective yield for UK firms on foreign deposits. Additionally, the international Fisher effect, which suggests that currencies with higher interest rates will depreciate, is not supported as the foreign currency depreciated despite having lower interest rates.

If a Foreign Currency Consistently Depreciated Against the Pound Over