São Paulo and Rio de Janeiro are the most expensive cities in Latin America moving up from 119th and 124th positions as world's costliest cities to 34th and 40th place respectively, according to the latest Cost of Living Survey from Mercer Human Resource Consulting .

This significant alteration is due to the strong appreciation of the Brazilian real against the US dollar (more than 20 %), which has occurred as a result of solid economic growth and increased foreign investment over the last two years, together with reduced public debt and high interest rates.

In particular, the cost of international-standard accommodation has risen significantly in these cities.

In contrast Asuncion in Paraguay remains the least expensive city globally, in 144th position with a score of 43.5. Other cheap cities include Buenos Aires, Montevideo and Caracas in 142nd place (score 54.8.), 138th (56.5) and 136th (57.2) respectively.

According to the Mercer survey, Moscow has replaced Tokyo as the world's most expensive city. Seoul is in second place, climbing three places since last year. Tokyo moves down two positions in the rankings to take third place, followed by Hong Kong.

With New York as the base city scoring 100 points, Moscow scores 123.9 and is nearly three times costlier than Asuncion, which has an index of 43.5.

Mercer's survey covers 144 cities across six continents and measures the comparative cost of over 200 items in each location, including housing, transport, food, clothing, household goods and entertainment. It is the world's most comprehensive cost of living survey and is used to help multinational companies and governments determine compensation allowances for their expatriate employees.

"We have seen significant shifts in the cost of living rankings over the past few years, reflecting a changing global market. For many companies it can now be more expensive to send employees to work in Russia or Korea than places like Japan or Switzerland which are often perceived to be more costly," commented Rebecca Powers, a Senior Consultant with Mercer's international business.

She added: "More companies are now sending employees on expatriate assignments, so there is a greater need to keep pace with the cost of living changes. Employers need to be proactive in managing their expatriate programs to ensure they receive a proper return on their investment and employees are compensated fairly."

There have been some significant changes in the rankings this year which are primarily due to exchange rate fluctuations, in particular the strengthening of the US dollar.

Asia

Four of the world's ten costliest cities are in Asia, with Seoul moving up from 5th to second place. While Tokyo has lost its title of the world most expensive city because of currency fluctuations between the Jap