The Russian ruble is as soon as once more one of the most undervalued currencies in the world, in line with the Big Mac Index, printed by The Economist.
The score is predicated on the shopping for energy of international currencies in line with the value of a McDonald’s Big Mac burger in several nations.
While the Big Mac prices $5.65 in the United States, in Russia the similar burger prices solely 169 rubles, or $2.27. According to those figures, the honest change of the Russian foreign money must be 29.91 rubles per one greenback. However, based mostly on the present change of 73.65 rubles per greenback, the Russian foreign money is undervalued by practically 60%.
According to the index, the ruble is the second most undervalued foreign money behind the Lebanese pound, which is undervalued by practically 70.2%. The record additionally contains the euro (undervalued by 11.1%) and the British pound (15.9%).
This shouldn’t be the first time the ruble has featured in the Big Mac Index’s high undervalued currencies, having held an analogous place in the rating in January 2021, in addition to in January and July final yr.
The record additionally contains overvalued currencies corresponding to the Venezuelan bolívar (overvalued by 47.7%), the Swiss franc (24.7%), in addition to the Norwegian and Swedish krona (11.5% and 9.6%, respectively).
The Big Mac Index has been calculated since 1986 and is printed twice a yr. It’s based mostly on the idea of buying energy parity (PPP) of a foreign money, which assumes that, in the long run, the change fee ought to equalize the normal worth of a basket of items and providers in several nations.
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