Big Mac Index: Ukrainian Hryvnia currently undervalued by 61.1%

Source : 112 Ukraine

The results of the study show that the exchange rate should be 10.95 hryvnias/one dollar
14:13, 14 January 2021

Open source

The Big Mac index, a method that is based on the theory of purchasing-power parity (PPP), shows that the Ukrainian hryvnia is one of the most undervalued currencies in the world today, The Economist reports.

According to the study, the cost of a Big Mac in Ukraine is 62 hryvnias, while in the United States it is up to 5.66 dollars. As a result, the Ukrainian hryvnia remains undervalued by 61.1% compared to the official exchange rate of 28.14 hryvnias/one dollar. In terms of purchasing power, the exchange rate should be 10.95 hryvnias/one dollar.

Related: Ukraine's hryvnia out of safety margin: What's next?

The most undervalued currencies in the world, as of January 2021, are the currencies of Russia, Turkey, South Africa, and Ukraine.

It is worth mentioning that the Ukrainian hryvnia was undervalued by 58.1% in January 2020, and in July 2020 - by 61.9%.

As we reported earlier, on January 11, the International Monetary Fund's (IMF) European Department's first stand-by revision mission resumed its work in Ukraine.

Its representatives are holding a remote discussion with the Ukrainian authorities on the latest economic developments as well as the measures and reforms needed to complete the first review of the stand-by program.

Related: Ukraine's trade deficit more than halved in 2020

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