Comment on How much should I pay for a Dollar next year?
commented on
05 Sep 2013, 11:35 AM
Abid Sep 5 2013, 4:37 pm
Hi Rohit,
That is a very very clever remark! And the theoretical answer is – YES!
Let me give a short cut breadcrumb trail
High inflation => High interest rate
High Inflation => Less valuable currency ( we call that purchasing power )
Less purchasing power => Cheaper currency
Put everything together 😉
But if you want to go all theoretical about it, I suggest a few links
rateparity”>http://en.wikipedia.org/wiki/Interestrateparity
rateparity”>http://en.wikipedia.org/wiki/Interestrateparity
powerparity”>http://en.wikipedia.org/wiki/Purchasingpowerparity
Cheers!
Abid