INTREST RATES 8% AND 14 % BRAZIL AND INDIA
Discussion
[quote=ChrisCanning_Argentex]Hi Davidbht,
There was recently a similar topic regarding the higher interest rates in New Zealand and Thailand.
Unfortunately, it is not really possible. By investing in the Brazilian Real or Indian Rupee you may be able to gain the higher levels of interest, but you would need to 'hope' that the currency does not devalue by more than than the rate of interest that you are gaining. To me, 'hope' is not a good basis for a solid investment.
Emerging currencies such as the Real and Rupee are often extremely volatile, it is more than likely that when you return the funds to the UK you would indeed lose money due to currency devaluation.
If, and it is a BIG if, the currencies did not devalue, you would indeed make a profit. However, you may then find that it is very difficult to get the money out of Brazil and India and back to the UK. There are very strict currency controls in these nations, and you may find that in order to get the money out you will have to pay severe penalties and charges, assuming they let you release the currency at all...
Finally, you may suggest that you take up a currency hedge to protect yourself against fluctuations in the exchange rates. Unfortunately, this is not possible either because the hedge would take into account the interest rate differential and therefore any interest 'gained' would automatically be taken away.
Hope this helps - sorry if it has bored you...!
Chris Canning[/quo
te]
thank you chris I used a currency forward contract in 2007 for UAE PROPERTY 5% down 95% within one year
regards
D
There was recently a similar topic regarding the higher interest rates in New Zealand and Thailand.
Unfortunately, it is not really possible. By investing in the Brazilian Real or Indian Rupee you may be able to gain the higher levels of interest, but you would need to 'hope' that the currency does not devalue by more than than the rate of interest that you are gaining. To me, 'hope' is not a good basis for a solid investment.
Emerging currencies such as the Real and Rupee are often extremely volatile, it is more than likely that when you return the funds to the UK you would indeed lose money due to currency devaluation.
If, and it is a BIG if, the currencies did not devalue, you would indeed make a profit. However, you may then find that it is very difficult to get the money out of Brazil and India and back to the UK. There are very strict currency controls in these nations, and you may find that in order to get the money out you will have to pay severe penalties and charges, assuming they let you release the currency at all...
Finally, you may suggest that you take up a currency hedge to protect yourself against fluctuations in the exchange rates. Unfortunately, this is not possible either because the hedge would take into account the interest rate differential and therefore any interest 'gained' would automatically be taken away.
Hope this helps - sorry if it has bored you...!
Chris Canning[/quo
te]
thank you chris I used a currency forward contract in 2007 for UAE PROPERTY 5% down 95% within one year
regards
D
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