Using Indian Rupee in Carry Trade: Is It Worth It?
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This study examines the profitability of using the Indian rupee in carry trade. Carry trade is the mostly used speculation strategy in foreign exchange markets. It has been well documented that such strategy is very rewarding most of the time. Carry traders take advantage of interest rate differential between two currencies to make profit assuming that the exchange rate would not offset this difference. This study examines the profitability of using the Indian rupee against two funding currencies which are the U.S. dollar and the Japanese yen.
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