Spot exchange rates-what happened to the real value of peso

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Reference no: EM131025916

The Mexican peso/US$ spot exchange rates in December 1997 and December 1998 were 6.3 and 7.0, respectively. During 1998 inflation rates in Mexico and US were at 23% and 5%, respectively, and the one year interest rates in December 1998 in pesos and dollars were 15% and 8% respectively. What happened to the real value of the peso during 1998?

Reference no: EM131025916

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