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What is the expected rr of the peso

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Argentina has inflation rate of 30 percent. Brazil's inflation rate of 10 percent. Argentine central bank fixed the Brazilian Real (name of the currency) at Rn = 0.10 peso per real.

-What is the expected Rr (real exchange ) of the peso?

-Is the Argentine Peso expected to appreciate or depreciate in real terms to Brazilian Real?

-How all of the above may affect the reserves of the Argentine Central Bank?

Reference no: EM133083368

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