Finance · South Africa
Big Mac Index Shows Rand Is Still Undervalued Against Dollar
Moneyweb · 2026/02/03
Summary
The Big Mac Index is a popular tool used to compare the value of currencies by looking at the price of a Big Mac burger in different countries. According to this index, the US dollar should be worth less than 9 South African rand. Johann Els, the chief economist at PSG Financial Services, points out that although the index uses only one product and has its limitations, it still shows that the rand is undervalued. This means that the rand might be weaker compared to the US dollar than what would be expected based on the cost of goods like the Big Mac. A weaker rand can affect import prices, inflation, and buying power in South Africa.
OnABudget takeaway: For consumers, a weaker rand can mean higher prices for imported goods and food items. Investors and small business owners should watch the currency closely as it can impact costs and profits.