There is a fixed exchange rate system between the United States of Albion (U.S.A.) and the Republic

Question:

There is a fixed system between the United States of Albion (U.S.A.) and the Republic of Oz and interest rates in the U.S.A. are always 2% higher than those in Oz due to a constant risk premium. Does UIP hold? What is the relationship between the monetary policy of the two economies?
Exchange Rate
The value of one currency for the purpose of conversion to another. Exchange Rate means on any day, for purposes of determining the Dollar Equivalent of any currency other than Dollars, the rate at which such currency may be exchanged into Dollars...