uncovered interest arbitrage

Definition

Economics

• The act of borrowing one currency and lending another without using the forward market to protect against change in the exchange rate. Because of the risk of exchange-rate change, this can result in a loss and is therefore not truly a form of arbitrage. Sometimes called the carry trade.

Nearby Definitions of “uncovered interest arbitrage”

• unconscionability
• unconscious
• unconsolidated subsidiary
• uncoordinated flight
• uncovered bear
• uncovered interest arbitrage
• uncovered interest parity
• undamped oscillation
• undamped wave
• undelete
• under-

Contexts for “uncovered interest arbitrage”

1 definition in context
• Economics