The International Fisher Effect (IFE) is an economic theory stating that the expected disparity between the exchange rate of two currencies is approximately equal to the difference between their countries' nominal interest rates. 

The International Fisher Effect (IFE) states that differences in nominal interest rates between countries can be used to predict changes in exchange rates. 

According to the IFE, countries with higher nominal interest rates experience higher rates of inflation, which will result in currency depreciation against other currencies.