Turkey's policy rate is 37%. Dollar funding is about 4%. Looks like 33% of free money. Every FX desk has known for a century where those 33 points actually go, and the answer decides which of these three on-chain products fits your book. Whoever sells you the currency hedge prices that gap. Sell a 37% currency forward against a 4% one and the forward trades at a discount of roughly that difference. Hedge in full and a foreign deposit pays you approximately your own domestic rate. That's textbook covered interest parity. But parity holds loosely rather than exactly. Balance sheet limits, capital controls, local plumbing as well as supply/demand can make this rate deviate. That spread is the cross-currency basis. For a hedged position, that basis is the return. Everything else in the 33 points goes to whoever sold the hedge. You get one decision hedge the currency, or hold it. Hold it and the last twelve months paid about 17%, because the lira fell about 17% against that 37% coupon. Currency returns compound rather than subtract, so about 17% survived the year. Had this been 2022, the lira fell by more than half. Tori, Piku and BRIX each run a version of this trade, and they resolve the same questions in different places. One hands you the currency risk on purpose. Two keep it and hedge it. Both are deliberate positioning calls that price differently. Four questions worth asking any of them: Who holds the currency risk? What instrument carries the hedge, and at what tenor? "Fully hedged" and "delta-neutral" describe a term-matched cross-currency swap and a stack of one-week forwards alike. What is the price when FX is shut and the chain is not? What does redemption look like on the day everyone leaves at once? Link below.