Interest rates and forex.

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

The interest rate is the percentage of funds a borrower must pay for the use of credit.

The most important is the discount rate, which is set by national banks that oversee the financial system and ensure the stability of national currencies.

The discount rate is particularly important in trading, as it affects two areas:

• Swap calculation - the trading system currently used in Forex assumes that one of the currencies involved in the transaction is borrowed, and the other is deposited.

Interest is accrued when the transaction is carried over to the next day. If the loan interest is higher, the client is forced to pay a swap, but there are also cases when a fee is charged for carrying the transaction over. In the latter case, the interest on the deposit for one of the currencies is greater than the loan commission for the second.

• Influence 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 - a downward trend.

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