The article explores the relationship between exchange rates, inflation, and interest rates. It finds that the Purchasing Power Parity does not hold for the USD/INR exchange rate. The researchers investigate the connection between real exchange rates and real interest rate differentials between India and the US. Initially, they find weak evidence of a long-term relationship, but after considering structural shifts, they discover a new equilibrium relationship between real exchange rates and real interest rate differentials. This highlights the importance of monetary factors and structural shifts in predicting exchange rates over time.