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According to yesterdays issue of the Wall Street Journal, Kenya and South Africa are currently offering significantly different nominal interest rates to depositors. Based on
According to yesterdays issue of the Wall Street Journal, Kenya and South Africa are currently offering significantly different nominal interest rates to depositors. Based on the International Fisher Effect, we can predict that the country with a relatively high nominal interest rate should see the value of their currency appreciate, while the country with a relatively low nominal interest rate should see the value of their currency depreciate.
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