According to the latest edition of the Big Mac Index published by The Economist, the Argentine peso experienced a significant correction in its real exchange rate against the dollar.
According to the survey conducted in July, the local currency is 14.6% undervalued, after having shown an overvaluation of 20.1% in January, positioning itself at that time as one of the most expensive currencies in the world, just behind the Swiss franc.
The change in trend is mainly attributable to the new exchange rate scheme promoted by the national government, which eased market restrictions and allowed for a gradual adjustment of the exchange rate. Meanwhile, the price of the Big Mac in Argentina —a benchmark used for this global indicator— decreased in dollars, costing USD 5.13 at the official June exchange rate, compared to the USD 6.01 it costs on average in the United States.
This difference leads to the purchasing power parity (PPP) exchange rate being set at $1,098.17, while the official rate was $1,286.01, reflecting an undervaluation.
This evolution has positive implications for external competitiveness, since a peso under these conditions favors local production over imports and improves the country's conditions in international trade. In practical terms, it results in greater convergence of domestic prices with international ones, a goal repeatedly stated by Javier Milei's government since taking office.
According to the report by the British outlet, the latest Big Mac index shows that, at least in terms of hamburgers, the trend has reversed. The behavior of the Argentine peso now resembles that of other also undervalued currencies, such as the New Zealand dollar, the Saudi riyal, and the Czech koruna, while at the opposite end are strongly overvalued currencies such as the Swiss franc (49.6%) and the Uruguayan peso (29.6%).
