The Economist basket just has the Big Mac, which is made
to the same recipe in almost all countries (India’s Maharaja Mac, a chicken
sandwich, is an exception). A Big Mac in Switzerland, costs $7.54 at market exchange rates compared with $4.79
in USA, so Big Mac index suggests the Swiss
Franc is 57.4 % overvalued. The Swiss
National Bank has to then further reduce interest rates!!!!
Country
|
Price
|
Plus/-percent
|
Switzerland
|
7.54
|
57.4
|
Norway
|
6.3
|
31.5
|
Denmark
|
5.38
|
12.3
|
Brazil
|
5.21
|
8.8
|
USA
|
4.79
|
0.0
|
Canada
|
4.64
|
-3.1
|
Great Britain
|
4.37
|
-8.8
|
Australia
|
4.32
|
-9.8
|
Euro Area
|
4.26
|
-11.1
|
Philippines
|
3.67
|
-23.4
|
Japan
|
3.14
|
-34.4
|
Thailand
|
3.04
|
-36.5
|
China
|
2.77
|
-42.2
|
India
|
1.89
|
-60.5
|
Russia
|
1.36
|
-71.6
|
Ukraine
|
1.2
|
-74.9
|
http://www.economist.com/news/finance-and-economics/21640370-some-currencies-lose-weight-diet-qe-and-cheap-oil-others-bulk-up-oily-and
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