In the table below, you have the prices of Big Mac around the world, and the corresponding exchange rates. Check if the Absolute PPP holds. After one year, one Mexican peso would buy less than one unit of Peruvian currency. Intuitively, we would expect the peso to decline relative to Peruvian currency. In general, track record is not good.
Arbitrage only works for tradeable goods.
IFE is based on PPP, and therefore does not often hold in practice.