A foreign currency will, on average, depreciate against the dollar at a percentage rate approximately equal to the amount by which its inflation rate exceeds that of the United States.

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This is known as the purchasing power parity theory, which suggests that currencies with higher inflation rates will have a tendency to lose value relative to currencies with lower inflation rates. This is because higher inflation rates erode the purchasing power of a currency, making goods and services more expensive, while lower inflation rates maintain purchasing power and keep prices relatively stable.

A Foreign Currency Will, on Average, Depreciate Against the Dollar