The Big Mac Index invented by The Economist is an informal way of measuring the purchasing power parity (PPP) between two currencies. Calculation of PPPs is based on the assumption that the dollar cost for a Big Mac in a particular country would be the same as in the United States. The indicator is chosen by The Economist magazine, as a measure of PPP, is based on the fact that the ingredients used in the preparation of Big Mac are the same over the globe, and hence variation in dollar cost in any country is a direct measure on the valuation of the currency. The study also points to the fact that, some of the developing countries, purposely undervalues their currency, in an effort to be competitive in the global market.
Since India was under British rule, the rupee was pegged to the British pound. From 1927 to 1966, 13 rupees = 1 pound. The peg was maintained until 1966 when the rupee was devalued and pegged to the U.S. dollar at a rate of 7.5 rupees = 1 dollar. This peg lasted until the U.S. dollar was devalued in 1971.
Source: International Financial Statistics (IFS)
Historical daily, monthly and annual time series. USD, Euro, Japanese yen, Chinese Yuan and other curencies Changes of exchange rates reflect movements of the currency exchange market, that is the interaction between supply and demand for currency units. Increased demand for national currency unit is caused by an increase in demand for national exported goods and services and leads to appreciation of national currency unit. Thus, exchange rate is an important indicator of international trade. See also: Agriculture | Commodities | Demographics | Economics | Education | Energy | Environment | Exchange Rates | Food Security | Foreign...