Relationship between Interest Rates and Supply of a currency? I am aware of how the interest rates affect the demand for a currency, but am baffled by how it affects the supply for a currency. I've read conflicting theories. Is it true that an increase in the interest rate increases the supply of a currency?

Many thanks
Maybe it will be useful for you to start:  [http://www.wisegeek.com/what-is-the-relationship-between-money-supply-and-interest-rate.htm][1]"
 As asked I summarize the core ideas, written in the link.  So, higher interest rate decreases the supply of the money:  


The central bank can set the reserve percentage, which tells how much percentage of the total money of each commercial bank must be hold back. The higher this rate, the less money the banks can give to the consumers as loans. 
Central bank also can set the target percentage, which is the interest rate between commercial banks or between commercial banks and the central bank. The higher this rate, the more the banks must pay when making loans among them, so the less money remains to loan to the consumers. 
Central bank can set the consumer interest rate, too. The higher rate the consumers have to pay after their loans, the less money remains at themselves. So the supply of the money decreased. (And as I think, but not in the link: if the interest rate after deposits are high, more people will think that it is better for them to save their money in the bank and not spend it for something else. If it is combined with point 1., it will also decrease the supply of money.)