Assuming the international Fisher effect is holding, what will be the effect of an increase of a country's nominal interest rates on the country's currency?

Question

Quizplus · Accepted Answer

According to the international Fisher effect, if a country's nominal interest rates increase, it suggests that inflation rates are expected to be higher in that country compared to others. This leads to an expectation that the country's currency will depreciate in the future as higher inflation reduces the currency's purchasing power.

Assuming the International Fisher Effect Is Holding, What Will Be