The purchasing power parity - which is the local price (Rs 84) divided by the price in the US ($4.20) - works out to 20. Based on the January 12 exchange rate of Rs 51.90 to a dollar, the burger cost $1.62 in India. In the case of India, the index uses the Maharaja Mac, which costs Rs 84, since the Big Mac is not sold here. The index compares the dollar price of the Big Mac in a country with the price of the burger in the US, where it currently sells for $4.20. For long, the US has been mounting pressure on China to appreciate its currency and move to a market-based exchange rate mechanism. The rupee, which has depreciated around 17% against the dollar in the last six months, is even more undervalued than the Chinese yuan, which was estimated to be 41% undervalued. The index measures the effective purchasing power of different currencies by looking at how much McDonald's popular burger costs in various countries. NEW DELHI: The Indian rupee is the world's most undervalued currency, trading at around 61% below its 'actual' price against the dollar, The Economist 's latest Big Mac Index has found.
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