Earn Money With Country To Country Interest Rates

Interest rate is very interesting think and in every country interest rate applies.in simple term interest rate means rate of borrowing.

why people not benifit from conutry to country interest rate for example the current rate in uk is 1% usa is 0.25 percent and in canada 1.50 and on the other side the interest rate in pakistan is 12% india 7% and chaina i think 5%
if u live in usa uk or canada etc u have oppurtunity to invest in interet rate means borrowing in ur country is very cheap u borrow money at 1 percent and earn 10 times more from pakistan or other country which has high interest rates. if u for u borrow 1000 pound loan from uk at 1 rate means u pay 1000*1/100=10/12=0.83 pm to bank and if u invest for example to pakistan which has 12% than u pay easily ur loan installmant amount.share ur comments

 

This kind of trades are called Currency Carry Trade and have a substantial element of risk involved.

The main risk is the enormous fluctuations in currency rates. And then interest rates too.

 

What a smart idea to make money.
Don't think other people are idiot .
(Sorry, I don't mean to be offensive.)
There are always policy difference, money/currency/financial regulations, investment laws, agreements in every country and between countries .
Complex finance services are already developed by bankers .
Do you mean you want to establish the business through internet and get behind of the complex documents mentioned above ?

 

they have higher interest rates because they have higher risk

check some countries in pacific ocean they offer enormous interest rates because they have a lot of chances to bankrupt/ deflate their currency

 

And if I am caught doing that in India, I am straight away behind the bars. As per the laws, its illegal to do or involve in financial business or transactions like loans, money lending etc without having a license.

 

that's not always true.

many countries keep interest rates high to control inflation.

many oil-rich countries in the middle east offer high interest rates.

with their huge reserves and trade/fiscal surpluses, the risk of a sovereign default is next to nil.

 

i have not heard of any such law. i am also residing in india but i have not heard anything like that u need license otherwise you cant borrow or lend...

 

thats the exchange risk that you are not taking into account.....

 

All I would suggest is to study the laws of the two countries where this transaction will happen to see if its legal to do this or not.

 

there is no hurdel in this way for eg if u live in india and u have very close friend in usa in usa interest rate 0.25 and in india i think 7 % u asked ur friend give loan from any usa bank and give u and u deposit in indian bank and earn 7 percent and return ur friend with there actual amount plus interets as in year or later well as profit ur friend

 

I don't think its so easy. There are lot of legal complications too apart from the conversion risks.

BTW, RBI is now keep is a eagle's eye on every international transaction and the banks have been strictly instructed to report any suspicious transaction.

To be frank, even if it was possible, I would never indulge in such type of activity.