Jan
12
Borrowing Yen to buy NZD
Filed Under Foreign Currency
With the yen interest rates practically scraping zero, corporate investors are borrowing the yen to buy NZD, with it’s steady high interest rate in excess ot 6%. How long will it last? Given that the new zealand dollar has recovered from it’s slide over the last year, it’s still anyone’s guess. Any capital depreciation could still hurt in a big way, like when the NZD slid close to 15% this time last year.
A more solid bet may instead be the steadily rising Australian dollar, which, while offering a more modest interest rate in the region of 5% per annum, has continued to rise over the last year and looks good for another few percentage points of capital gains.
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