Friday, January 13, 2006

2006: Same as 2005

The Economist has released its Big Mac Index for 2006. The Chinese yuan is 59% undervalued compared to the dollar. This is the same estimate as last year, so I will refrain from interpretting it, opting instead to point you to last year's analysis. So much for China's famed 2% revaluing of the yuan.

Other highlights of the 2006 Big Mac Index:
  • The Swiss Franc is once again the most overvalued currency against the dollar. (57% this year versus 65% in 2005)

  • The New Taiwan Dollar is undervalued by 25% (versus 21% in 2005).

  • The Euro is overvalued by 11% (down from 17%).

For those interested in the Chinese economy, The New Economist offers a roundup of must-read articles.