What is the effect of interest rates on exchange rate?

When interest rates increase the cost of borrowing also increases, and hence the demand reduces giving rise to depreciation of currency and on the other hand, when interest rates increase, people want to invest more in that country’s securities which causes demand to increase and hence increases value of the currency. So what should I conclude?does interest rate increase the value of a currency or not?

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? Best Answer

Good point that actually got me as well didn’t realize that I would say u should argue both

Whether it increases or not is to be seem in relation to the interdependency of certain major driving countries, I believe. But certainly the interest rates have a direct influence on the country involved and a ripple effect in the ocean of currencies being traded in the market.