Economist's analysis: What the dollar exchange rate should actually be, according to the Big Mac Index

Economist Mahfi Eğilmez has offered a stark analysis of the Turkish Lira's value, suggesting the dollar should be priced much higher than its current market rate if purchasing power is the sole determinant.

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The difference between this calculation and the market rate is striking.

Using the Big Mac Index, a long-standing tool by The Economist to compare currencies, Eğilmez calculated that the Turkish Lira's purchasing power parity indicates a dollar exchange rate of around 65 TL. This figure contrasts sharply with the prevailing market rate of approximately 47.50 TL at the end of July 2026.

Eğilmez explained that the Big Mac Index compares the price of a standardized Big Mac burger in different countries to gauge currency values. In Turkey, a Big Mac cost 325 TL, which, at the market rate, equates to $6.84, significantly above the global average of $5. This discrepancy led to the 65 TL purchasing power parity calculation.

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The exchange rate is not determined solely by supply and demand conditions.

However, Eğilmez cautioned against viewing the 65 TL as the definitive "real" exchange rate. He emphasized that actual currency values are shaped by a complex interplay of factors including interest rate differentials, risk premiums, capital flows, central bank interventions, and market expectations. The significant gap between the market rate and the Big Mac Index calculation, however, remains a notable point of discussion regarding the Lira's true value.

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The calculated 65 TL level should not be considered the definitive and undisputed real value of the Turkish Lira.