Burgeronomics: Big Mac index suggests rupee is undervalued by over 40%

A burger in India costs considerably less than peer economies

An index that illustrates currency valuation using the price of a McDonald’s burger points to increasing undervaluation of the Indian rupee relative to the dollar.

The Big Mac index suggests that the rupee is undervalued by 43.3 per cent relative to the dollar, after gross domestic product (GDP) adjustments, according to a note from The Economist publication, which calculates the index values on a periodic basis. The reading for January 2022 suggested a 28.5 per cent undervaluation, pointing to a widening gap over time.

The index calculates undervaluation based on the difference in prices between a Big Mac in the