Interest rates and forex.

In any country there is a concept like an interest rate, it is used in relation to the national currency and plays a rather important role in economics and finance.

Interest rate is the amount of funds in percentage terms that the borrower must pay for using loan funds.

The most important is the discount rate, which is set by national banks that control the financial system and ensure the stability of the exchange rate of national currency units.

It is the latter that is of great importance when trading; the influence of the discount rate affects two areas:

• Swap calculation - the trading system currently used on Forex assumes that you take one of the currencies involved in the transaction on credit, and the second is on deposit.

Interest is accrued when the transaction is carried over to the next day.

If the credit interest is higher, then the client is forced to pay a swap, but there are cases when a fee is charged for transferring the transaction to the commission place. In the latter case, the interest on the deposit for one of the currencies is greater than the loan commission for the second. • Impact on the trend - a decrease or increase in the discount rate is almost always reflected in the direction of the trend. An increase causes an upward trend , a decrease causes a downward trend.

Information about changes in discount rates can always be found in the trader's calendar , and current discount rates are listed here .