Russian ruble exchange rate is undervalued by almost 70%.One dollar should cost 23,12 rubles, not 75. This is the conclusion of the Economist, based on "big Mac index".
Russian ruble exchange rate is undervalued by almost 70%.One dollar should cost 23,12 rubles, not 75. This is the conclusion of the Economist, based on "big Mac index".
In the USA big Mac costs $4,93, and in Russia - 114 rubles that is $1,53 (in dollars).
The most undervalued currency is Venezuelan Bolivar.
To remember:
THE Big Mac index was invented by The Economist in 1986 as a lighthearted guide to whether currencies are at their “correct” level. It is based on the theory of purchasing-power parity (PPP), the notion that in the long run exchange rates should move towards the rate that would equalise the prices of an identical basket of goods and services (in this case, a burger) in any two countries. For example, the average price of a Big Mac in America in January 2016 was $4.93; in China it was only $2.68 at market exchange rates. So the "raw" Big Mac index says that the yuan was undervalued by 46% at that time.
The full list of investigated countries can be seen here. http://www.economist.com/content/big-mac-index?fsrc=scn/fb/wl/bl/dc/st/thebigmacindex
