The “Big Mac” index adopted by the Economist magazine to evaluate countries’ currencies showed that most of the world’s currencies are undervalued against the dollar, and the same applies to Arab currencies.
The “Economist” launched the “Big Mac” index in 1986, and it became a global standard and a way to measure the purchasing power of currencies in order to know whether they are under or above their true value.
The index is based on a comparison of the purchasing power of currencies in 48 countries, where the “hamburger” represents a unit that facilitates the comparison of the exchange rate of currencies against the dollar or its purchasing value.
The Economist indicated that the Lebanese pound is the most undervalued currency in the world, and considered that the Lebanese currency is undervalued by 70.2%, followed by the Russian ruble, which was considered undervalued by 59.9%.
The following is a table showing the evaluation of some Arab currencies against the dollar according to the “Big Mac” index (data for July 2021):