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interest rate on 30 day peso bank deposits in Argentina is 11 percent, the interest rate on 30- day dollar bank deposits in Argentina is
interest rate on 30 day peso bank deposits in Argentina is 11 percent, the interest rate on 30- day dollar bank deposits in Argentina is 6 percent and the interest rate on 30day dollar deposits in the US is 2 percent. identify the total risk premium on peso bank deposits and decompose this premium into the currency and country premiums. Assuming the peso is fixed to the dollar, explain how these premiums are likely to change if Argentinas official reserves decrease by a substantial amount.
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