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 in Forex assumes that one of the currencies involved in the transaction is borrowed, and the other is kept on deposit.

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 to the commission place. In the latter case, the interest on the deposit for one of the currencies is higher 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 .