Big-Mac Index reveals 14 most undervalued currencies

Big-Mac Index reveals 14 most undervalued currencies Big-Mac price in Azerbaijan is lower by 56.6% than in US
Finance
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January 19, 2018 14:54
Big-Mac Index reveals 14 most undervalued currencies

Baku. 19 January. REPORT.AZ/ 14 most undervalued currencies for Big-Mac Index were named.

Report informs referring to Vestifinance.ru, Big-Mac Index adopted as an unofficial calculation method of purchasing power parity. According to this index, commodity bundle price in different countries should be balanced by the exchange rate. Simply, standard burger by McDonald's is based instead of commodity bundle. The reason for the index is to identify the real exchange rates of different currencies.

Notably, Big-Mac price makes $ 5.28 in the US. As of January 2018, the same product costs $ 2.29 in Russia, which shows that RUR is cheaper by 57%. It makes $ 2.45 (-53.5%) in South Africa, $ 2.83 (-46%) in Turkey, $ 2.97 (-44%) in Poland, $ 3.17 (-40%) in China, $ 3.43 (-35%) in Japan, $ 3.81 (-28%) in the Czech Republic, $ 4.41 (-16.5%) in the UK, $ 4.51 (-14.5%) in New Zealand, $ 4.71 (-11%) in Australia, $ 4.84 (-8%) in euro zone, $ 4.93 (-6.6%) in Denmark, $ 5.11 (-3.2%) in Brazil and $ 5.26 (-0.4%) in Canada.

For comparison, the price of Big Mac in Azerbaijan makes 3.90 AZN or $ 2.29, which is lower by 56.6% than in the United States. That is, Azerbaijani manat is lower by 56.6% according to Big Mac Index. This shows that US-dollar rate in Azerbaijan should be 0.74 AZN.

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