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Big Mac Index: Ukrainian hryvnia underrated by 61.9%

Source : 112 Ukraine

According to the Big Mac index, the exchange rate should be 10.33 hryvnia per dollar
20:37, 17 July 2020

Open source

Big Mac Index shows that Ukrainian hryvnia is one of the most underrated currencies of the world as The Economist reported.

According to the research, the price of Big Mac in Ukraine makes 59 hryvnia ($2.15), while in the U.S. it makes $5.71. In the result, the Ukrainian hryvnia remains underrated by 61.9% in comparison with the official exchange rate that is 27.13 hryvnia per dollar. Regarding the purchasing capacity, the exchange rate should be 10.33 hryvnia per dollar.

Related: Trend towards strengthening hryvnia will continue in 2020, - PM Honcharuk

In July 2020, the most underrated currencies of the world are monetary units of South Africa, Russia, Turkey, Ukraine, Mexico and Azerbaijan.

The most overrated currencies are Swiss franc, Lebanese pound and Norwegian krone. In Switzerland, Big Mac costs by 20.9% more than in the U.S., in Lebanon by 4.2% and in Norway by 0.8%.

Related: Hryvnia strengthened due to labor migrants and high crop yield, - IMF

In 2019, hryvnia turned out to be underestimated by 65,2$. The real course of the purchasing capacity should be in the sum of 9,68 hryvnia per dollar.

In 2018, Ukraine’s national currency, hryvnia was recognized as one of the world’s most undervalued currencies according to the Big Mac Index.

Burgernomics was never seen as a precise gauge of currency misevaluation, it only served as a tool to make exchange-rate theory more digestible. The Big Mac index, however, has become a worldwide standard, has been included in a variety of economics textbooks, and has become the subject of at least 20 academic research papers.

 

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