FX Converter & Carry
Spot, forward, and the carry between two currencies.
Spot conversion plus forward rate from covered interest parity — and the implied carry.
Built and reviewed by LeadAfrik Research
Data-grounded analysis on African economies
Inputs
Currencies & spot
Inputs
Interest rates (for forward)
Verdict
1,000,000 KES = 7,800 USD
Spot 1 KES = 0.007800 USD • Forward (1y) 0.007088.
Forward rate is computed by covered interest parity. If KES pays 15% and USD pays 4.5%, the forward must compensate or arbitrage exists. The discount of 9.13% is the price of locking in today.
Conversion
Spot exchange
KES amount
1,000,000
USD value
7,800
Forward & carry
The market's view of the future
1y forward rate
0.007088
1 KES → USD
Forward premium
-9.13%
Carry
10.50%
KES rate − USD rate
Carry interpretation
Earn carry holding KES
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Common questions
What is covered interest parity?
The forward exchange rate is determined by the spot rate and the interest rate differential between two currencies: F = S × (1 + r_quote) ÷ (1 + r_base). If a currency has a higher rate, its forward is at a discount — that's the cost of carry.
What is FX carry?
Borrowing in a low-rate currency and investing in a high-rate one. The 'carry' is the rate differential. It looks like free money in calm markets but is exposed to currency moves — when the high-rate currency depreciates, the carry trade unwinds violently.
Why doesn't the forward rate match my expectation?
Forwards reflect interest-rate differentials, not forecasts. A currency at a forward discount might still appreciate; one at a premium might still depreciate. Forwards price the cost of hedging, not the future spot.
What's a 'spot' rate vs 'forward' rate?
Spot is for delivery in two business days at today's rate. Forward is contracted today for delivery on a future date, with the rate locked in. Banks quote forwards in 'pips' relative to spot — positive pips = forward premium, negative = discount.