Financial Times FT.com

Short View: Currencies and fair value

By John Authers

Published: October 23 2008 19:37 | Last updated: October 23 2008 19:37

Fair value is an elusive concept. But some of the crashing emerging market currencies, long overvalued, may now be at a fair level.

Over time, exchange rates tend to move in line with purchasing power parity; if inflation is faster in one country, its currency should depreciate to account for this.

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