Foreign Exchange Markets

16. Suppose the following CPI data is available for SA and Russia: Consumer Price Consumer Price Inflation 2021 Index (2020) Index (2021) South Africa 123.10 131.68 Russia 124.25 128.65 According to relative PPP (the accurate version), the exchange rate between the Rand (ZAR) and Ruble (RUB), expressed as an indirect quotation from a South African perspective, should have between 2020 and 2021 by a) Increased; 3.31% b) decreased; 3.31% c) decreased; 3.21% increased; 3.21% 4 increased; 3.43% decreased; 3.43% None of the above 3 marks