HOW LONG IS A BIG MAC GOOD FOR MAC

Norwegian krone overvalued by the market by 7.50%. However, the value of this pair is currently quoted around 0.89 in Forex, which makes the Swiss currency overvalued by the market by 28.80%.

HOW LONG IS A BIG MAC GOOD FOR MAC

Notably, the currencies of India, Pakistan, Philippines, and other low-income countries are not in the top five most undervalued currencies in 2021.Īs for the most highly valued currencies, the statistics by countries shows that the world’s most overvalued (expensive) currency is the Swiss franc.Ĭonsidering that Big Mac costs 7.29 francs in Switzerland, the USD/CHF rate expressed in the Big Mac Index terms should be 1.15 francs per dollar. In the list of world’s most undervalued currencies, Russian ruble and the Lebanese Pound are accompanied by the turkish lira (undervalued by 64.5%), the ukrainian hryvnia (by 61.10%), and the south african rand (by 61.90%). Therefore, we can conclude that the Russian currency is undervalued by the market by almost 68%. However, the ruble is much cheaper in Forex – about 74.63 ruble per US dollar (as of January 2021). While the price of the burger in the United States is $5.66, the Russian currency exchange rate is 23.85 ruble per dollar in terms of the Big Mac Index. In 2019, the Russian ruble was the most undervalued (by 64.5%) currency worldwide. Thus, the Lebanese Pound is the world’s most undervalued (cheapest) currency according to the Big Mac Index. The Lebanese Pound exchange rate expressed in terms of the Big Mac Index in 2021 is 2738.52 pound per dollar.Ĭonsidering that the current market rate of the Lebanese currency is about 8750 pound, rather than 2738.52 per US dollar, the pound is undervalued by approximately 68.70%. The most relevant Big Mac Index so far (as of January 2021) is presented in the table below. Therefore, The Economist experts use Big Mac alone instead of determining the cost of a consumer basket (more complex method) for each country. Besides, the same ingredients are used for Big Mac in any country: meat, bread, cheese, lettuce, onions, etc. Big Mac is the most well-known product in McDonalds’ fast-food chain. Why exactly was the Big Mac taken as an indicator? Thus, The Economist introduced a simple indicator of the fundamental value of currencies globally. It all started in 1986 when The Economist magazine decided to estimate the currencies’ value by countries based on the prices of Big Mac at McDonald’s fast-food restaurants. The Big Mac Index is the price of the burger in various countries that are converted to one currency (such as the US dollar) and used to measure purchasing power parity. However, few people know that it gave rise to the so-called Big Mac Index, which is used to compare the value of currencies of different countries. This hamburger is probably the most famous in the product line of the American fast food industry.

How long is a big mac good for