Emergic: Rajesh Jain's Blog

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Undervalued Indian Rupee?

August 24th, 2005 · No Comments

The Indian Economy [Blog] discusses the Economist’s Big Mac Index and comments: “Its a pity the Economist does not include the Indian Rupee on the Index. However, since we at IE believe in regular contributions to the human knowledge pool, I have worked this out for you, dear reader. If we assume that a Big Mac or its closest equivalent (the Maharaja burger?) costs Rs 55 in India ($1.26 at an exchange rate of 43.5), then we find the Indian rupee is undervalued by the exact same amount as the RMB Yuan 59 per cent. This means that you need to add the INR to the RMB stash youre already hoarding, to cash out at a later date.”

Tags: Emerging Markets

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