Can inflation cause the trade weighted index for a country to increase?

The trade weighted index measures the differences in price between consumer goods in one country to another. The higher the index is, the more purchasing power a country has. The index might dip lower due to inflation because fewer people will be able to afford products, unless there is government intervention to fix the currency. Such government action is usually performed by central banks, such as the US Federal Reserve, and consists of raising interest rates and slowing the growth of the supply of money.
 
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