Suppose that Russia decided to increase interest rates by %2, from %17 to %19, and Russia's inflation rate is %16) USA's interest rate is %0.25 and inflation rate is %2.5  Considering the inflation and interest differential between the USA and Russia, what is likely to happen to real exchange rate in Russia? Explain with this formula iRuble− idollar = π  − π *

Economics:
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ISBN:9781285859460
Author:BOYES, William
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Chapter36: Exchange Rates And Financial Links Between Countries
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Suppose that Russia decided to increase interest rates by %2, from %17 to %19, and Russia's inflation rate is %16) USA's interest rate is %0.25 and inflation rate is %2.5 

Considering the inflation and interest differential between the USA and Russia, what is likely to happen to real exchange rate in Russia?

Explain with this formula iRuble− idollar = π  − π *

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