Topical Terminology  

       

Topical Terminology > Uncovered Interest Parity



1 Definition

Uncovered Interest Parity

For Uncovered Interest Parity we have a term and definition in International Economics.



Uncovered Interest Parity (International Economics)

Equality of expected returns on otherwise comparable financial assets denominated in two currencies, without any cover against exchange risk. Uncovered interest parity requires approximately that i = i* + a where i is the domestic interest rate, i* the foreign interest rate, and a the expected appreciation of foreign currency at an annualized percentage rate.




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