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The Economist Called The Russian Ruble One Of The Most Undervalued Currencies In The World

The Economist Called The Russian Ruble One Of The Most Undervalued Currencies In The World

The Russian ruble is the second most undervalued currency in the world according to the "Big Mac Index," The Economist reported, citing its calculations.

"Big Mac in Russia costs 135 rubles, and in the United States — $5.66. The implied exchange rate is 23.85. The difference between this and the actual exchange rate (74.63) suggests that the Russian ruble is undervalued by 68%," the publication reported.

The most undervalued currency in the world was the Lebanese pound: its indicator on the "Big Mac Index" was 68.7%.

The most overvalued currencies in the world were the Norwegian krona-overvalued by 7.5%, the Swedish krona-by 12.6%, the Swiss franc-overvalued by 28.8%, according to the index.

The" Big Mac Index " is a rating based on purchasing power parity, which began to be compiled by The Economist in 1986. The magazine compares currencies of different countries based on the price of a big mac, which is one of the most popular burgers in McDonald's and is sold in more than 100 countries. For the calculation of the index, The Economist chose big mac because it consists of seven ingredients at once, and its recipe is the same for all countries. The journal notes that it never intended to use the "Bigmac index" to accurately assess the imbalance of the currency, but it began to be mentioned in economic textbooks and scientific studies.

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