4 year annualized interest rate in the US = 9%
4 year annualized interest rate in Singapore =6%
Assume Interest Rate Parity holds
Singaporain dollar spot rate = $0.60
If the forward rate is used to forecast exchange rates, what will be the forecast for the Singapore dollar's spot rate in 4 years?
What percentage appreciation or depreciation does this forecast imply over the 4 year period?