P
   
   Peso Problem
   















 

P

Peso Problem

(1) A perennial discount (high money market rate) on a currency which is officially pegged to the U.S. dollar or some other reference currency. The discount exists because the market perceives a small immediate probability of a large devaluation. (2) Generically, the perception, embedded in a price or rate, of a small probability of a large change.

Glossary * P