The enormous purchasing power of the dollar in Ukraine is confirmed by The Economist’s latest Big Mac Index. In a survey of 50 major economies, plus the Euro zone, Ukraine has the second most undervalued currency, bested only by Russia.
In a gauge of purchasing power parity, the hryvnia is 65% below where the dollar exchange rate should be. Instead of 28 hryvnia to the dollar, the Index says the hryvnia exchange rate should should be about 10 hryvnia to one dollar.
By comparison, the Russian ruble is 70% undervalued, the Turkish lira is 64% undervalued, and the Moldovan leu is 59% undervalued.