This is evidenced by the rating data for January 2022.
Thus, the Ukrainian national currency fell to sixth place in this list from the end, and six months ago it was in eighth place.
The publication concludes with the “Big Mac Index”, which does not claim economic truth, but only compares currencies with the value of products that are part of the classic burger from the fast food chain McDonald’s.
Thus, The Economist reports that the Big Mac in Ukraine costs 69 hryvnia, while in the United States – 5.81 dollars (at the exchange rate at the time of calculation is 164.8 hryvnia). That is, the exchange rate of the Ukrainian currency according to the “Big Poppy Index” is 58.1% undervalued compared to the actual exchange rate.
It is noted that according to this calculation, the exchange rate of the dollar against the hryvnia in terms of purchasing power should be at the level of 11.88 UAH / dollar.
In January 2022, the currencies of Russia, Turkey and Indonesia were also ranked as the most undervalued currencies in the world. The currencies with increased value are the Swiss franc and the Norwegian krone. In Switzerland, the price of a Big Mac is 22.2% more expensive than its counterpart in the United States, and in Norway – 10%.
What is this index?
The Economist has been calculating the Big Mac Index since 1986. It was designed as an informal method of currency comparison, based on the notion of purchasing power parity, according to which you can buy the same set of goods or services for the same amount in different currencies of the world.
McDonald’s burger was taken as a conditional standard, since its composition does not change from state to state. The Big Mac Index allows you to calculate how much the official exchange rate differs from the “real” – which is determined by the value of the burger.
Last January, the hryvnia was among the five most undervalued currencies in the world. After that, it went up 3 positions, but now it’s down again.