The Economist in 1986 created the “Big Mac Index” to assess the over- or undervaluation of currencies.
The approach assumes that exchange rates should, over time, move to levels that would equalise prices of identical goods or services in any two countries.
Because many African countries don’t have McDonald’s, Rand Merchant Bank used milk instead.
Over the last five years, most currencies, on average, trended higher towards overvaluation.
The South African rand, however, overvalued five years ago, is undervalued today.
For more detail, listen to the interview in the audio below.
Get the 10 most-read articles of the week from Bruce Whitfield’s The Money Show, emailed to you every Friday morning:
Recommendedby NEWSROOM AI
Advertisers traditionally warn against working with children. In this ad it works beautifully, says ad expert Andy Rice.
It also ordered the company to pay for all the costs of the application. Bruce Whitfield interviews EWN’s Clement Manyathela.
The Money Show’s Bruce Whitfield interviews Simon Brown, Financial Educator at Just One Lap.
Ray White interviews Thobelani Maphumulo, author of "Invest Your Way to Wealth".
It’s a phenomenon across most of the West, says Gavin Ralston. But not in fast-growing Asia, where listings are picking up pace.
Manuel Franco bought the ticket in March and knew he won but waited almost a month before claiming his colossal prize.
On Monday Zuma told the commission that there were spies who were planted within the ANC to work with the apartheid government.
ANC stalwart Dr Sydney Mufamadi questions why Zuma is bringing up the names of the alleged spies only now.
Journalist and author Mandy Wiener describes former footballer Marc Batchelor's links to alleged underworld figures.
Former Sars employee Bizoski Manyike responds to the Sunday Times article that called him a 'dope-smoking Rastafarian'.
Castle Lager came in second, followed by FNB, Black Label, Discovery and Vodacom, according to the 2019 Brand Finance report.
Bruce Whitfield talks to Leon Louw (Free Market Foundation) about his attitude toward money (hopes, fears, successes, failures...)
The Money Show’s Bruce Whitfield asks Henry Biddlecombe (an analyst at Anchor Capital) for his stock picks of the week.
Bruce Whitfield interviews Phillip de Wet (Business Insider), Robert Walton (Boutique Collective Investments) and Brandon Topham.
Investigative journalist Jacques Pauw says he's sorry for any harm caused in his article on Mkhwebane and her principal witness.