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Big Mac index: hryvnia was included in the top 10 most undervalued currencies

Big Mac index: Top 10 most undervalued currencies. Photo: Unsplash / Brett Jordan

Big Mac index: Top 10 most undervalued currencies. Photo: Unsplash / Brett Jordan

The hryvnia turned out to be one of the most undervalued currencies. According to the Big Mac index, the Ukrainian currency is undervalued by 57.7%, The Economist reported in its research.

The study clarified that a Big Mac costs $5.65 in the United States, and 65 UAH in Ukraine, so the fair rate should be 11.5 UAH per dollar.

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At the same time, the overvalued currencies are:

  • Venezuelan bolívar—by 47.7%;
  • Swiss franc—by almost 25%;
  • Norwegian krone—by 11.5%;
  • Swedish krona—by slightly less than 10%.

All other currencies were undervalued. The top 10 undervalued ones includes:

  • the Lebanese pound—by 70.2%;
  • Russian ruble—by 59.9%;
  • South African rand—up 59.6%;
  • Azerbaijani manat—by 58.9%;
  • Turkish lira—by 58.7%;
  • Indonesian rupee—by 58.5%;
  • Malaysian ringgit—by 58.1%;
  • hryvnia—by 57.7%;
  • Romanian leu—by 55.2%;
  • Indian rupee—by 54.9%.

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 should cost the same everywhere.

The Economist emphasizes that this index is not a full-fledged instrument for evaluating currencies, but only a way to make the logic of the exchange rate more understandable.

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