Assume that you are a Turkish MNC that is concerned about the exchange rates. The expected annual inflation rate in Turkey has increased to 48% following the pandemic. However, the expected annual inflation rate in their neighbouring Iran is only 39%. The currency in Turkey is the Turkish lira () and currency in Iran is the Iranian rial (RIs). The current exchange rate for the Iranian rial is 0.00064. After supply and demand for the RIs has adjusted according to purchasing power parity, the new exchange rate for the RIs will be

0.00064

0.00055

0.00068

0.00072

0.00051