Big Mac: lat still underrated

  • 2006-01-25
  • Baltic News Service
RIGA - Latvia's national currency, the lat, is underrated against the U.S. dollar by 29.5 percent, the latest Big Mac index published by The Economist magazine shows.
A Big Mac in Latvia costs 1.29 lats, or $2.22 (U.S.), while in the U.S.A. the average price is $3.15.

In the eurozone a Big Mac costs $3.51, meaning that the euro is overrated against the U.S. dollar by 11.4 percent.

Also among overrated European currencies is also the Swiss frank 's 56.5 percent, the Danish krone 's 42.5 percent, the Swedish krooner 's 35.9 percent and the British pound 's 5.4 percent, The Economist found.

The most underrated currencies are in Thailand 's 52.1 percent, Malaysia 's 54 percent and China 's 58.7 percent.

The Big Mac index, published since 1986, is based on purchasing power parity, or the assumption that the price of one and the same product made in different countries and converted into U.S. dollars should be the same.