Compare the real purchasing power of currencies between countries.
PPP Exchange Rate—
Currency B is—
Valuation Gap—
PPP Rate = Price in B / Price in A Valuation = ((PPP Rate − Actual Rate) / Actual Rate) × 100
What is Purchasing Power Parity?
PPP theory states that exchange rates should adjust so that identical goods cost the same in different countries. The Big Mac Index by The Economist is a popular informal measure of PPP.