The Economist has released its new ranking for July 2025. The most undervalued currencies in the world in July 2025 are those of Egypt, Indonesia, India, Taiwan, Vietnam, the Philippines, and South Africa (by 50-58%).
The overvalued currencies are the Swiss franc (by 49.6%), the Uruguayan peso (by 29.6%), the Norwegian krone (by 22.1%), the Swedish krona (by 21.8%), the Danish krone (by 16.6%), and the euro (by 1.5%). This is mainly due to the record fall of the dollar against world currencies in the first half of 2025.
The Big Mac Index is an informal way of assessing the purchasing power of currencies and determining how overvalued or undervalued the currencies of different countries are relative to the US dollar. It was developed in 1986 by The Economist magazine.
The index is based on the idea of purchasing power parity (PPP). Ideally, the exact product should cost the same in different countries when converted into a single currency. The Big Mac from McDonald’s is used as such a product because it is sold almost everywhere and contains local components (meat, buns, cheese, labor).