Investments glossary

Outward Arbitrage

Outward arbitrage is a type of arbitrage that multinational, American-based banks engage in, which takes advantage of differences in interest rates between the United States and other countries. Outward arbitrage occurs when interest rates are lower in the United States than abroad, so that banks can borrow in the United States at a low rate, and then lend that money abroad at a higher rate, pocketing the difference as profit.

Click to rate this post!
[Total: 0 Average: 0]

Leave a Reply

Your email address will not be published. Required fields are marked *