Country Currency Code Big Mac Price Local Currency Big Mac Price In Dollars Actual Dollar Exchange Rate March 25, 2011
/$ China CNY 13.73 $2.09 6.5581
Egypt EGP 13.52 $2.27 5.9434
Malaysia MYR 7.33 $2.43 3.0223
Colombia COP 8282.00 $4.42 1873.4000
United States USD 3.80 $3.80 1.0000
Yuan:
Implied PPP of the dollar = price of big mac in China in Yuan/ Price of big mac in the U.S. in $ = YUAN 13.73/$3.80 ≈ Yuan 3.61/$
under (-) over (+) valuation against the dollar: Yuan 3.61/$ - Yuan 6.5581/$ ÷ Yuan 6.5581/$ = -0.44 ≈ -44%
Such percentage indicates that the Chinese yuan is undervalued by 44% versus the U.S. dollar.
Egyptian Pound
Implied PPP of the dollar = price of big mac in Egypt in local currency / Price of big mac in the U.S. in $ = Egyptian pound 13.52/$3.80 ≈ Egyptian pound 3.55/$
under (-) over (+) valuation against the dollar:= implied rate – actual rate / actual rate= /$ = 3.55- 5.9434 /5.9434 = -0.4026 = -40%
Such percentage indicates that the Egyptian pound is undervalued by 40% versus the U.S. dollar
Malaysian Ringit
Implied PPP of the dollar = price of big mac in Malaysia in local