This paper investigates real interest rate parity (RIP) among the Pacific Basin economies in the post-liberalization period using a new panel unit root test, the PANIC proposed by Bai and Ng (2004). The major improvement of this test over existing tests is that it allows cross-sectional units to be cointegrated. We find that the RIP holds only when the US is the base country. The real interest rates in this region converge to the US rate. In contrast to the existing literature, we do not find that the local real rates converge to the Japanese rate.