Dollar accounts are frozen in Country X and "haircut" speculations are all over the place. In the meantime, a bank in Country X offers its clients a chance to multiply the fresh dollars (dollars that aren't in the banking system of Country X) by 2.1 if they put them into local dollar accounts. These fresh dollars will be subject to the same regulations with the existing dollar accounts. Is this information useful to calculate expected amount of haircut? If so, what is the expected percentage of haircut on existing dollar accounts in Country X? The banks in the US offer 5 percent interest rate on dollar accounts and there isn't any haircut risk attached to them, and the banks in Country X offer 10 percent interest rate on dollar accounts. Assume that expected inflation is 25 percent in Country X and 1 percent in the USA. Assume that there is no default risk of banks in Country X and USA. Haircut is simply the reduction applied to the value of an asset, for example if you have 1 dollar in the bank and it will be treated as 0.8 dollars if 20 percent haircut is applied.