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Jo PPP
I have got one question: in your world economic outlook database, there is a subject called "Implied PPP conversion rate - National currency per US dollar". I have used it to check the exchange rate between the Vietnamese Dong and the US Dollar. But does this figure really represent what I was searching for? Other sources, like yahoo finance, holiday guides etc. give an exchange rate of about 16000 Dongs per dollar, which is far higher than your a bit more than 3000 Dongs per Dollar.

I am looking forward to getting your response.
Yours sincerely
4/9/2008 1:41:47 AM
WEOModerator Re : PPP
The exchange rates shown on different websites and those at banks or currency exchange businesses are "market" exchange rates. They are called market exchange rates because they reflect the price of one currency in terms of another given current supply and demand factors for these currencies. This is not the same concept as the implied PPP conversion rate on our database.

The Purchasing-power-parity (PPP) between two countries is the rate at which the currency of one country needs to be converted into that of a second country to ensure that a given amount of the first country's currency will purchase the same volume of goods and services in the second country as it does in the first. In the WEO online database, it is expressed as local currency per U.S. dollar. The advantages and disadvantages of using PPP-based exchange rates rather than market exchange rates are discussed in the Finance & Development article "PPP Versus the Market, Which Weight Matters?" (March 2007) and Box 1.2 of the September 2003 WEO. For the latest PPP weights revision, please see Figure 1.16 from Chapter 1 of the April 2008 WEO. For 2003 PPP weights revision, please see Box A2 from the April 2004 WEO. For the 2000 PPP weights revision, please see Box A1 from the May 2000 WEO.

Hope this answers your question.

Angela
4/9/2008 10:49:58 AM