Interest rates between two countries tend to converge if:

Name: Interest rates between two countries tend to converge if:
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When the residents of the two countries believe that a foreign asset is as good as a domestic one, they will be willing to hold foreign assets and this will increase the demand for foreign assets, which will in turn increase the value of the foreign currency. As a result, interest rates between the two countries will tend to converge or come closer together.

Interest Rates Between Two Countries Tend to Converge If