Covered vs uncovered interest rate parity

[gazhoo]

What’s the difference?

 

[justinkc]

covered interest rate = F
uncovered interest rate = E(s)

 

[idreesz]

Covered deals with forward rates and uncovered deals with expected spot rates.
Theoretically both should be equal

 

[nicob]

uncovered is a theoretical relation based on inflation differential.
covered is for certain, as locked in with a contract

 

[justinkc]

relative purchasing parity is uses inflation rates to calculate E(s)
Uncovered uses interest rates=e(s)
Covered uses Interest rate =f