Brazil's Overvalued Real The Brazilian real has appreciated 33 percent against the U.S.

1 year ago
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Brazil #x27;s Overvalued Real The Brazilian real has appreciated 33 percent against the U.S. dollar and has pushed up the price of a Big Mac in Sao Paulo to 4.60, higher than the New York price of 3.99 . Despite Brazil #x27;s interest rate being at 8.75 percent a year compared to the U.S. interest rate at near zero, foreign funds flowing into Brazil surged in October. Source: Bloomberg News, October 27,2009. Does interest rate parity hold? If not, why not?

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