The Russian ruble has been ranked the world’s most underrated foreign money towards the US greenback by the 2021 Huge Mac Index, which gives an evaluation of the buying energy of currencies in contrast to one another.
The index, created by The Economist, represents a light-hearted information to alignment of world currencies in regard to the buck. It’s primarily based on comparative examine of worth for a McDonald’s Huge Mac in several nations.
The Huge Mac Index, revealed by the journal twice a yr, helps to estimate purchasing-power parity of nationwide currencies, in addition to their ‘actual’ change charge. It stems from the truth that the identical product is to be bought on the identical worth in all of the nations.
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The most recent information reveals Huge Mac prices about $ 5.66 within the US, whereas the worth of the benchmark burger in Russia totals 135 rubles ($ 1.81). This reveals that the Russian ruble is undervalued by 68 %, and that one greenback ought to value 28.85 rubles, in comparison with Wednesday’s change charge of round 74 rubles per greenback.
Based mostly on variations in gross home product (GDP) per particular person, a Huge Mac ought to value 39 % much less. Based on the index, this implies the ruble is 47.three % undervalued.
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The Russian foreign money had been rated as extremely undervalued towards the US greenback over the previous 9 years. In 2020, the ruble noticed one other 20-percent hunch because of the Covid-19 pandemic, continually increasing anti-Russian sanctions and a drop in oil costs.
The ruble’s plunge additionally means Russia now boasts the most affordable Huge Macs on the earth. Russia is the one one among the many 55 nations tracked by the index, the place a Huge Mac prices beneath two .
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