Israel placed third in "The Economist" Big Mac Index table.
The Big Mac Index published today by "The Economist" indicates that the cumulative shekel devaluation since the beginning of the year has still not returned the shekel to its true value.
The Big Mac Index compares the prices of Big Mac hamburgers in 27 countries in terms of purchasing power.
The Big Mac Index is used to test the real value of the exchange rate in every country. If the index in a given country is higher than that in the US, the exchange rate of that country's currency vis-a-vis the dollar is higher than its true value.
Israel is currently ranked third in the Big Mac Index, together with Britain and Peru. These are the only three countries ahead of the US in the index.
A Big Mac hamburger in Israel costs $2.82, while it costs $2.59 in the US. Comparing these prices shows that the shekel is still 8.9% higher against the dollar than its real value. Six months ago, the Big Mac Index indicated the shekel was 43% higher than its real value.
Published by Israel's Business Arena on December 23, 2001