ABSTRACT
One factor of growth and development in
economics
is
invesment,
Interest
Rate Parity (IRP) is one of
the
other theory which explain about relationship of
market
forex
and international money market. Theory of
lRP
expressess
the
difference of interest rate
(sekuritas)
in international money market that will tend
to equal to premium rate forward
I
discount. Wit.h theory oflRP, a lenders
win
be
able to determine in what currency of his fund wiHbe invested.
Ry
using theory of
tRP,
the writer
will
cheek which one is better
II-for
investorto investhis fund in or bey'.lnd the sea, by comparingtribe storey;level of
domestic intere!lt rate and foreign intereRt rate which is premium or discounted
rate of forward, each month during year 2003. The collecting
data
technic used
by
writer is
direct
record-keeping data mount data mount domestic rate
of
interest in
Indonesia, domestic rate of interest in United States, invesment in Indonesia, rate
of spot, and also rate offorward each month duringyear 2003.
Through calculation by using equation of Interest Rate Parity, in the fact
1..'1201
there is no conditionof rate of interestparity in Indonesia.hence investor
wi!!
have advantages if conducting action arbitrase by borrowing fund in dollar
currency later;theninvesting it in
rupiah
currency.
