# The Big Mac Index Converter

USD
ARS
ARS
USD

Explanation

The implied value of 0 USD in Argentina according to the Big Mac Index is 0 ARS. At this exchange rate purchasing power parity exists, and 0 USD buys 0 Big Macs in both countries.

The real value of 0 USD at market exchange rates is 0 ARS. There's no purchasing power parity as 0 USD buys 0 Big Macs in United States but 0 Big Macs in Argentina. In other words that means that if something costs 0 USD in United States, in order for it to have the same perceived value pricing in Argentina, it has to be priced at 0 ARS.

If we calculate backwards the implied value of 0 ARS is 0 USD and the real market value of 0 ARS is 0 USD. In other words that means that in terms of actual purchasing power, having 0 USD in Argentina would be the same as having 0 USD in United States.

Currency data from the Big Mac Index. Last update: Jul 2017

This is a simple currency converter that uses the Big Mac Index currency data as a base. Invented in 1986 by The Economist, the index monitors the prices of the Big Mac hamburger in various countries around the world and compares them according to the theory of purchasing power parity. This converter uses the official Big Mac Index data to calculate the "correct" price ratio between a given set of countries, that is the price at which purchasing power parity exists.

Implied Value - this is what the amount in the foreign currency should be, assuming that the countries have purchasing power parity. At this exchange rate a Big Mac costs the same in both countries.

Market Value - this is the converted amount according to the market exchange rates.

If the implied value is higher than the market value, that means the target currency is overvalued against the base currency. From a marketer's point of view that also means that a product theoretically should sell for more in the target country than in the base country.

If the implied value is lower than the market value, that means the target currency is undervalued against the base currency. From a marketer's point of view that also means that a product theoretically should sell for less in the target country than in the base country.

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