THE Chinese economy received a public relations boost from an unlikely source yesterday, when a study of Big Mac prices suggested that the yuan was the world's most undervalued currency. According to this year's Big Mac index, published today by The Economist, burgers in Beijing are the cheapest in the world when the local price is converted into dollars. The yuan, it argues, is therefore due for a sharp rise. Ronald McDonald's taste for the yuan received a cautious welcome from economists.
China has a very fast growing economy.
Other hot tips from the burger world include the Russian rouble and the Hong Kong dollar, which the index suggests are due for an upturn, delivering a good omen for political stability. The Swiss, it suggests, are setting themselves up for a fall. Britain comes off a little better. The going rate for a Big Mac in Britain is 1.81, 22pc above the price in America. But Britons pay a similar amount to the Germans, suggesting relative exchange rate stability in preparation for a possible single currency.