Credit is expensive, and an overvalued currency makes imported food cheaper than home-grown varieties.
For some, political intervention has supplanted an overvalued currency as the biggest risk in Brazil.
Hence the Swiss franc is the most overvalued currency (by 64%), the ringgit the most undervalued (by 51%).
ECONOMIST: The Economist offers some hot tips on exchange rates
The current analysis suggests that the Brazilian real is the most overvalued currency.
Mr Salinas's boom was unsustainable, based as it was on high borrowing, a big current-account deficit and an overvalued currency.
The economic benefits Germany reaps from the current situation imposes a de facto overvalued currency on most other European countries, hampering their exports.
Its symptoms include not just bloated government revenues, but an overvalued currency that is making life impossible for firms in the non-oil economy.
Since the sine qua non of Dutch disease is an overvalued currency, we can see if this is actually the case with the Russian ruble.
Indeed, like Argentina, Italy faces a growing competitiveness loss given an increasingly overvalued currency and the risk of falling exports and growing current account deficit.
Buffeted by the international financial turmoil, Brazil, having doubled interest rates to bolster its overvalued currency, turned to long-term reforms to cut its budget deficit.
Hundreds of factories went bankrupt during the 1990s when national manufacturers, wrestling with a hugely overvalued currency, were unable to compete with far cheaper imported goods.
During his campaign, Mr. Abe argued that the Yen is overvalued and that currency depreciation is needed to make Japanese exports more competitive.
If a currency seems ludicrously overvalued, interest rates should be cut even if that means inflation moves slightly above target in the short term.
Commercial farming in Mato Grosso has had to overcome formidable obstacles: high transport costs, recently low world prices, a currency till now overvalued, and a chronic lack of farm credit.
The stock market looked overvalued in early 1998, with a currency crisis under way in Asia and Alan Greenspan beginning to hike interest rates.
If local inflation remains higher than that of the country to which the currency is pegged, the currencies of countries with currency boards can also become overvalued and uncompetitive.
But now the government is shifting its line of attack from interest rates to the currency, which many economists agree is overvalued.
ECONOMIST: Strains between governments and their central banks
Besides the Israeli shekel, the other main exception is the South Korean won which, as a result of currency appreciation, is now 8% overvalued against the dollar.
Bidders were also typically more overvalued than their targets, especially when stock was the currency.
ECONOMIST: Mergers are more common when shares are overvalued
应用推荐