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How currencies fare and the cost of a burger in 30 nations

Last updated on: January 18, 2012 09:40 IST

How currencies fare and the cost of a burger in 30 nations

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The Indian rupee is the world's most undervalued currency, finds The Economist's latest Big Mac Index.

The rupee is valued at 61 per cent below its 'actual' price against the dollar, according to The Economist's latest Big Mac Index.

Rupee had depreciated sharply by about 19 per cent last year and even fell to a record low of 54.30 against the US dollar on December 15, 2011. 

The price of Big Mac burgers of McDonald's is considered for the index for the reason of the presence of fast-food chain across most of the countries and the magazine calls this theory 'burgernomics'.

Out of the 10 most undervalued currencies, 8 are from Asia.

The Economist's index is based on purchasing-power parity so in the long term, exchange rates should adjust to equal the price of a basket of goods and services in different countries.

The index calculates the purchasing power of different currencies by finding out the cost of a McDonald's burger across the globe.

This particular basket holds the prices of McDonald's Big Mac around the world when compared with its American average of $4.20.

Check out how currencies fare vis-a-vis the dollar and see the cost of a McDonald's Big Mac in 20 nations...


Image: Purchasing power of different currencies by finding out the cost of a McDonald's burger.

Tags: Big Mac , Economist , Asia , US

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How currencies fare and the cost of a burger in 30 nations

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1. Switzerland

The Swiss Franc is the most overvalued currency in the world. It is overvalued by 62 per cent compared to the US dollar.

Burger cost: $6.81

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Image: -A picture illustration of US dollar, Swiss Franc, British pound notes.
Photographs: Kacper Pempel/Reuters.
Tags: , US

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How currencies fare and the cost of a burger in 30 nations

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2. Norway

The Norwegian Krone is the second most overvalued currency up by 60 per cent.

Burger cost: $6.79

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Image: Norwegian Krone.

Tags: , Norway

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How currencies fare and the cost of a burger in 30 nations

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3. Sweden

Burger cost
: $5.91
Swedish Krona: Overvalued by 41%

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Image: Swedish Krona.

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How currencies fare and the cost of a burger in 30 nations

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4. Brazil

Burger cost: $5.68
Brazilian Real: Overvalued by 35%

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Image: A photo illustration of new Brazilian R$50 and R$100 real currency notes after their launch in Brasilia.
Photographs: Ricardo Moraes/Reuters.
Tags: , Brazil

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How currencies fare and the cost of a burger in 30 nations

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5. Denmark

Burger cost: $
5.37
Danish krone:
Overvalued by over 25%

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Image: Danish krone.

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How currencies fare and the cost of a burger in 30 nations

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6. Australia

Burger cost: $4.94
Australian dollar: Overvalued by over 15%

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Image: Australian one dollar coins surround a US one dollar note.
Photographs: Tim Wimborne/Reuters.
Tags: , Australia

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7. Argentina

Burger cost: $4.64
Argentine peso: Overvalued by 10%

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Image: clerk sells dollars at a foreign exchange house in Buenos Aires.
Photographs: Enrique Marcarian/Reuters.
Tags: , Argentina

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8. Canada

Burger cost: $4.63
Canadian dollar: Overvalued by 10%

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Image: New Canadian 100 dollar bills made of polymer are placed in glasses of juice, cola and water in Toronto.
Photographs: Mark Blinch/Reuters.
Tags: , Canada

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9. Uruguay

Burger cost: $4.63
Uruguayan peso: Overvalued by 10%

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Image: Uruguayan peso note.

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10. Columbia

Burger cost: $4.54
Colombian Peso: Overvalued by 8%

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Image: Columbian Peso.

Tags: , Columbia

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11. Euro area (Average of four cities)

Burger cost: $4.43
Euro: Overvalued by 5%

Click NEXT to see the 10 countries with the most undervalued currencies, where a burger is the cheapest...

 



Image: A one euro coin is held in an adjustable spanner.
Photographs: Srdjan Zivulovic/Reuters.
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India

Burger cost: $1.62
(Maharaja Mac price)

The Indian Rupee has hit record lows sinking by 60 per cent when compared to the dollar.

In July 2011, the rupee was trading around 44.40 to a dollar. Today, the rupee's exchange value is Rs 51.38.

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Image: Kashmiri shopkeeper sits near garlands made of Indian currency.
Photographs: Fayaz Kabli/Reuters.
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Ukraine

Burger cost: $2.11
Ukrainian Hryvnia: Undervalued by 50%

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Image: A cashier counts Ukrainian hryvnia banknotes at a shop in Kiev.
Photographs: Konstantin Chernichkin/Reuters.

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Hong Kong

Burger cost: $2.12
Hong Kong Dollars: Undervalued by 48%

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Image: latest edition of Hong Kong dollar notes launched by HSBC.
Photographs: Bobby Yip/Reuters.
Tags: , Hong Kong

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Malaysia

Burger cost: $2.34
Malaysian Ringgit: Undervalued by 40%

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Image: A money changer shows Malaysian ringgit notes at his shop in Putrajaya.
Photographs: Bazuki Muhammad/Reuters.
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China

Burger cost
: $2.44
Chinese Yuan: Undervalued by over 40%

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Image: An employee operates a camera to zoom in on the image of a Chinese one-hundred yuan banknote at a production exhibition in Wuhan.
Photographs: Reuters.
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South Africa

Burger cost
: $2.45
South African Rand: Undervalued by over 40%

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Image: A bank teller looks at South African rand note.
Photographs: Reuters.
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Thailand

Burger cost
: $2.46
Thai Baht: Undervalued by over 30%

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Image: A shopkeeper counts Thai baht banknotes as he buys gold from a customer in Bangkok's Chinatown.
Photographs: Sukree Sukplang/Reuters.
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Indonesia

Burger cost
: $2.46
Indonesian Rupiah:
Undervalued by 30%

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Image: A vendor counts his rupiah bank notes before closing his business in Jakarta.

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Taiwan

Burger cost
: $2.50
Taiwan dollar:
Undervalued by 40%

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Image: Protesters carry a banner printed with the new Taiwan dollar currency.
Photographs: Nicky Loh/Reuters.
Tags: , Taiwan

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Sri Lanka

Burger cost: $2.55
Sri Lankan rupee: Undervalued by about 40%

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Image: A customer holds Sri Lankan rupee notes as he waits for more cash from a teller at a money exchange in Colombo.
Photographs: Andrew Caballero-Reynolds/Reuters.
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Russia

Burger cost: $2.55
Russian Rouble: Undervalued by about 40%

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Image: An employee of a bank checks the authenticity of Russian rouble banknotes.
Photographs: Alexander Demianchuk/Reuters.
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Egypt

Burger cost: $2.57
Egyptian pound: Undervalued by about 40%

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Image: An Egyptian woman walks into a currency exchange office in downtown Cairo.
Photographs: Asmaa Waguih/Reuters.
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Poland

Burger cost: $2.58
Polish Zlotych: Undervalued by about 38%

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Image: A stack of 100 Polish Zloty banknotes are being counted at the national bank headquarters in Warsaw.
Photographs: Kacper Pempel/Reuters.
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Hungary

Burger cost: $2.63
Hungarian Forint: Undervalued by over 35%

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Image: A dog passes a currency exchange rate chart at a money changer in Budapest.
Photographs: Bernadett Szabo/Reuters.
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Saudi Arabia

Burger cost: $2.67
Saudi Arabian Riyal: Undervalued by about 35%

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Image: A man holds a 50 riyal ($13.3) note, which shows the Dome of the Rock in Jerusalem old city and Saudi's King Abdullah.
Photographs: Ali Jarekji/Reuters.
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Philippines

Burger cost: $2.68
Philippine Peso: Undervalued by about 35%

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Image: A worker checks $100 bills at a money changer in Manila.
Photographs: Cheryl Ravelo/Reuters.
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Mexico

Burger cost: $2.70
Mexican peso: Undervalued by about 35%

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Image: Dollars in cash are seen in this photograph released by Mexico's tax office in Mexico.
Photographs: Reuters.
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Lithuania
Burger cost: $2.87
Lithuanian Litas: Undervalued by about 32%

Pakistan
Burger cost: $2.89
Pakistani rupee: Undervalued by about 31%



Image: A currency dealer counts Pakistani rupees and U.S. dollars at his shop in Karachi.
Photographs: Athar Hussain/Reuters.
Tags: Pakistan

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