The ruble has become the most undervalued currency in the world

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www.vsyako.netPhoto: Eugene Vadim epanchitsev / RIA Novosti

The Russian ruble has become the most undervalued currency in the world. It is reported the Economist magazine.

The newspaper published the so-called “big Mac index” — a study that measures the fair value of the dollar based on the price of the Burger. It turned out that the U.S. is much more expensive than all the other monetary units. While the ruble exchange rate is 64.5 per cent higher than its real value.

In the United States a big Mac costs $ 5.74, while in Russia — about two dollars (a little over 130 rubles). Thus, the Russian currency should be 22.65 rubles for one US dollar. As of July 13, the American dollar is worth 63 of the ruble.

The authors of the study noted that the closest to the real value are the canadian dollar, Swedish and Norwegian Krone, as well as the Israeli shekel.

A similar conclusion magazine came in January 2019. Then the ruble was also the most undervalued currency against the dollar.

“Big Mac index” is calculated since 1986. It is based on the theory of purchasing power parity (PPP), which says that currency must be adjusted as long as the price of an identical basket of goods or a Burger, as in this case — will not be the same everywhere. The Economist argues that the PPP clearly shows the long term — undervalued currency in the “big Mac index” tend to strengthen on average in the next 10 years, and Vice versa.

In addition to the “big Mac index” in the world there are “latte index” and “index of Ukrainian borsch”, which is considered in two options — with meat or without.

Video, photo All from Russia.

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