Hello everyone, When we enter a curency swap, given the interest difference between a country A and B, a company A would pay less interest than in the country A and a company B would pay more interest than in country B by the spot contract… But with the interest parity relation, the forward contact that settle the currency swap will improve the parity rate of country A whose money comes back in the country A where interest rate are higher… So basically company A pays less interest in country B and get more currency of country A at the end !!
Is this normal ?