Visit Ukraine – The Big Mac Index 2024: what should be the real hryvnia to dollar exchange rate in Ukraine

In July 2024, The Economist published updated data on the Big Mac Index, according to which the hryvnia is significantly undervalued against the US dollar. Learn more aboutwhat the real exchange rate of the Ukrainian hryvnia to the dollar should be

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According to The Economist’s July 2024 rating, the Ukrainian hryvnia is undervalued against the US dollar by 49.5%. This means that according to this index, the real hryvnia exchange rate should be significantly higher than the official exchange rate.

The cost of a Big Mac

In Ukraine, the price of one Big Mac is 118 hryvnias, while in the United States this popular burger costs $5.69. The actual exchange rate of 41.05 UAH/$ undervalues the hryvnia by almost half.

According to purchasing power parity, the real hryvnia exchange rate should be about 20.74 UAH/$.

The most undervalued currencies

The Economist also named the most undervalued currencies in the world:

• Taiwan dollar

• Indonesian rupiah

• Egyptian pound

• Indian rupee

• South African rand

The most overvalued currencies

On the other hand, the most overvalued currencies were:

• Swiss franc (+41.8%)

• Uruguayan peso (+24.3%)

• Norwegian krone (+18.9%)

• Argentine peso (+15%)

• Euro (+6.5%)

• British pound (+3.6%)

What the Big Mac Index measures?

The Big Mac Index was developed in 1986 and estimates the cost of a Big Mac hamburger in different countries of the world.

Its purpose is to show how much a country’s currency is undervalued or overvalued against the US dollar based on the cost of this burger. Since the Big Mac includes bread, meat, and vegetables, it is considered a kind of “consumption basket” that allows for estimates based on purchasing power parity.

History of the Big Mac rating

This rating was first introduced in 1986 and has been used as an informal indicator of currency value ever since.

Financial experts chose the Big Mac because of its composition, which is comparable to a grocery basket, allowing it to reflect the real state of each country’s economy.

We remind you! Three Ukrainian cities were at the bottom of the global cost of living ranking. Read our previous article to find out what places Kyiv, Odesa, and Lviv took, as well as which cities are considered the most expensive to live in.

Want to know more? Read the latest news and useful materials about Ukraine and the world in the News section.

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You can take out such insurance on the Visit Ukraine website. Follow the link and choose an insurance policy with the appropriate coverage and indemnity amount for the required period.

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Visit Ukraine Insurance – safe travel in Ukraine (insurance covering military risks);

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