. Last Updated: 07/27/2016

Burger Index Shows Undervalued Ruble

The Russian ruble is undervalued by 18 percent against the U.S. dollar, according to a recently published key economic barometer: the Big Mac index.


Compiled annually by Britain's The Economist, the index lists the price of a McDonald's Big Mac hamburger in 33 countries, in the local currency and dollar equivalent.


The 9,500-ruble price tag of the burger, or $1.93 at the April 22 exchange rate used by The Economist, compared favorably with the average $2.36 cost in the United States.


Under the theory of purchasing-power parity -- that identical items should in the long run cost the same amount in different countries, regardless of exchange rates -- the ruble's real value should be 4,025 to the dollar, the weekly said. That would mean the ruble was undervalued by 18 percent.


The Economist calculations were based on a ruble rate of 4,918 to the dollar. It has since sunk to 4,964.


Burger lovers pay the least in China, where a Big Mac cost a mere $1.15.