In theory other things being equal a percentage increase in

In theory, other things being equal, a percentage increase in a country’s rate of inflation should lead to a percentage decrease in the value of its currency. Under what conditions this relationship would not hold in reality.

Solution

If the rate of inflation is same in world economy and/or in other countries, then it will not hold good. because as per purchasing power parity, the value fo different currencies in this case will remain unchanged.