The hryvnia is one of the ten most undervalued currencies in the world. According to the Big Mac index, the Ukrainian currency is undervalued by 58.1%, The Economist magazine reports this in its study.
The analysts clarify that a Big Mac costs $5.81 in the US, and 69 UAH in Ukraine, so the fair exchange rate should be 11.88 UAH per dollar.
At the same time, the following currencies are overvalued:
- Swiss franc—by 20.2%
- Norwegian krone—by 10%.
The top five most undervalued ones are as follows:
- Russian ruble—by 70%,
- Turkish lira—by 69.9%,
- Indonesian rupiah—by 59.3%,
- Malaysian ringgit—by 58.9%,
- Romanian leu—58.1%.
The Ukrainian hryvnia ranks 6th (58.1%).
Context. The Big Mac Index was established in 1986. The Big Mac is presented as a universal product that can be bought in most countries, and therefore it should cost the same everywhere.
The Economist points out that this index is not a full-fledged instrument for evaluating currencies, but only a way to make the logic of the exchange rate clearer.