Press Release Please view in HTML January 7th 2016 For Immediate Release Burgers are “cheaper than chips” in most countries according to The Economist’s guide to currencies, the Big Mac index Highlights: • As the Federal Reserve raises interest rates, most currencies seem very cheap against the US Dollar according to the latest Big Mac index • The currencies of Switzerland, Norway and Sweden are still overvalued against the greenback • Emerging market currencies dragged down by falling commodity prices The Economist today publishes its latest Big Mac index offering food for thought on exchange rates. The index is based on the theory of purchasing-power parity (PPP), the notion that in the long run exchange rates should move towards the rate that would equalise the prices of an identical basket of goods and services in different countries. Our basket contains just one item, a Big Mac, since it is sold all over the world The latest Big Mac index indicates that most currencies are very cheap relative to the US dollar. This has been driven by America’s strong economy and rising interest rates. The central banks of the euro zone and Japan are still loosening monetary policy, leaving the euro undervalued by 19% and the yen undervalued by 37% against the dollar, according to the index. The slump in commodity prices has flame-grilled the currencies of commodity exporters such as the Russia and the Brazil, making Big Macs in those countries more affordable for Americans seeking a bargain burger. In contrast the Swiss franc, Norwegian krone and the Danish krone continue to seem overvalued against the dollar, i.e. burgers in those countries are more expensive. But controlling for higher GDP per person (and more expensive labour) in these countries, the Swiss franc is only 2% overvalued, and the Danish krone undervalued by 17% relative to the dollar. To see where you can find the cheapest and most expensive Big Macs in the world, please visit The Economist’s Big Mac index here: http://www.economist.com/news/finance-and-economics/21685489-big-currency-devaluations-are- not-boosting-exports-much-they-used-after -ENDS- For more information on The Big Mac Index or to arrange an interview with our editors, contact Holly Donahue at [email protected] or +44 (0)20 7576 8379 Notes to media: About The Economist (www.economist.com) With a growing global circulation (1.5 million including both print* and digital) and a reputation for insightful analysis and perspective on every aspect of world events, The Economist is one of the most widely recognised and well-read current affairs publications. The paper covers politics, business, science and technology, and books and arts, concluding each week with the obituary. In addition to the web-only content such as blogs, debates and audio/video programmes available on the website, The Economist is available to download for reading on Android, Blackberry PlayBook, iPhone or iPad devices. *Audit Bureau of Circulations Worldwide, Jan-Jun 2015 .