The hryvnia – the most undervalued currency index the big Mac

Гривна - самая недооцененная валюта по индексу Биг-Мака

According to the Index big Mac rate should be 8, 9 hryvnia per dollar

In accordance with the Index, the big Mac exchange rate now must be 8, 9 hryvnia per dollar. According to estimates, the hryvnia is undervalued against the dollar by 69%.

Ukrainian hryvnia took the last position in the Index big Mac in January 2018. This means that the hryvnia, according to this ranking the most undervalued currency, says The Economist.

Index the big Mac was invented by The Economist in 1986. It is based on the theory of purchasing power parity and is used as a humorous indicator of the value of the currency.

For example, the average price of a big Mac in America in January of 2018, totaled 5.28 dollar, while in China it cost only a dollar 3.17. Thus, the Index the big Mac indicates that the yuan is undervalued by 40%.

On the last positions in front of Ukraine in the Index the big Mac in January, and there is Egypt, Malaysia and Russia.

In Ukraine in January 2018, a big Mac cost 1.64 dollar. This means that the hryvnia is undervalued against the dollar by 69%.

The hryvnia, according to the calculations of The Economist, should be about 8, 9 hryvnia per dollar.

However, according to the rating, only in three countries the currency is overvalued is Switzerland, Norway and Sweden.

“Burgernomics” is not positioned as a precise measure of currency misalignment. However, the Index, the big Mac has become a global standard, included in several economic textbooks and is the subject of at least 20 academic studies.

As earlier reported, the Ukrainian hryvnia according to the Index big Mac was underestimated by 68.8%.

According to the materials:

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