If the Australian dollar devalues against the Japanese yen by 10%, the yen will appreciate by 10.11% O 33.32% 11.11% 25.55%6 A rise in the inflation rate in one nation relative to others will be associated with a fall in the first nation's exchange rate and with a rise of its interest rate relative to foreign interest rates. The two conditions combined result in the Effect. International Fisher Unbiased forward rate Herstatt O Fisher