An overvalued currency, such as the Argentinean peso in 2001, is an indicator of a balance of payments surplus.

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An overvalued currency means that the value of the currency is higher than its true value, which can be caused by factors such as excessive demand or government intervention in the currency market. This can actually lead to a balance of payments deficit, as the high value of the currency can make exports less competitive and increase imports. The example of the Argentinean peso in 2001 actually resulted in a severe economic crisis, with the country defaulting on its debt and experiencing a major recession.

An Overvalued Currency, Such as the Argentinean Peso in 2001