real interest rate vs inflation effect - just don't get it currency, interest, understand

Kapie

I am thoroughly confused with the effect of real interest rate increase and inflation. I understand the increase in real interest rate increases capital inflows and hence causes appreciation of domestic currency.

But inflation seems to have a negative effect- is it because the exchange rate falls as a result of increased inflation?


I am so confused with this whole topic - am not even sure my question makes sense.

Ok my question is why isnt the increase in real interest rate have the same impact on the nominal interest rate(which is what i assume all the equations are based on). I.e increase in real interest rate causes a fall in exchange rate as well.