Exchange rate question (kind of) (1 Viewer)

[nikitasuitsrevenge]

When in questions that say what happens to the level of capital inflows when interest rates are low? Do this refer to both interest rates for lending and borrowing? Any help would be great.

 

[Constantine]

Capital inflow is about foreign capital coming into Australia yeah? So it would increase when interest rates are high, regardless of it being in context of lending or borrowing. It would only matter if you're required to talk about the domestic impacts, capital outflow or increased foreign borrowing etc.

Correct me if I'm wrong.