Practice Drills: Estimating Fair Value of a Currency Pair Using PPP

A hands-on drill course for experienced retail investors, HNIs and angel investors who already know what purchasing power parity says and now want to use it. You will work one currency pair, USD/INR, end to end: source CPI series and exchange rate averages from RBI, MOSPI and the US Bureau of Labor Statistics, estimate absolute PPP from price baskets and World Bank conversion factors, pick a defensible base year, project relative PPP fair value, measure misalignment, extend the method to EUR/INR, GBP/INR and JPY/INR, read the RBI REER index, apply a simple productivity correction, estimate how long a gap takes to close, and turn the result into a hedge ratio for an offshore allocation. Every number is worked and every step is repeatable with public data.