The Argentine peso was fixed by a currency board at 1.00 ps/$ throughout the 1990s....
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The Argentine peso was fixed by a currency board at 1.00 ps/$ throughout the 1990s. In January 2002, the Argentine peso was launched. On January 29, 2003, it was trading at 2.20 ps/$. During this one-year period, Argentina's inflation rate was 20% on an annualized basis. Inflation in the U.S. during this same period was 3.2% annualized. What should the exchange rate have been in January 2003 if the PPP had taken place?
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