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Sir, if 1 country has higher rate of inflation than another then its currency will depreciate over time. (PPPT). Correct?
Similarly, if 1 country has higher rate of interest than another then its currency will depreciate over time. (IRPT). Correct?
In case of D19 Q1 c , in examiner solution it is mentioned that in the case of Okan Co’s subsidiary company, economic risk may have occurred because interest rates have been kept at a high level. High interest rates will be attractive to international investors, as they can get higher returns and may lead to the Y$ becoming stronger relative to other currencies.
Sir here how Y$ will become stronger? Infact, it should be depreciated na according to the above IRPT?
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