Currency risk is a key part of interest rate differences. Currency boards aim to lower this risk, leading to lower domestic interest rates. A study looked at Argentina and Hong Kong's currency boards to see how currency risk premiums behave. Despite the fixed nature of currency boards, the currency risk premium is usually positive and can be quite high. It tends to rise over time but can flatten or even invert during turbulent periods. The premium is influenced by local and global factors like expectations of devaluation and risk perceptions.