Is there any correlation.
When demand pull/cost push inflation occurs does this lead to a rise/fall in the exchange rate? I assume it rises, but am not clear and can find no clarification on this.
Quick Question - relationship between inflation and exchange rate for Macro AS level Watch
- Thread Starter
- 22-05-2016 19:56
- 22-05-2016 20:37
If inflation occurs, it means that the country's international competitiveness will fall. Therefore, there will be less demand for the currency as less people want to purchase their products. The exchange rate will decrease.