International Fisher Effect (IFE)

Definition

An exchange rate model used to predict spot price movements between two or more foreign currencies based on the relationship between the prevailing interest rates in those countries. Higher interest rates imply higher inflation which will subject a currency to price depreciation.

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The international fisher effect worked great for us as it allowed us to determine things we needed to know for the future.

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You should try and see if you can figure out when an international fisher effect might take place and adjust ahead of time.

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We had used the International Fisher Effect to best understand the effects of the inflationary changes made during the project.

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International Fisher Effect International Fisher Effect