The Big Mac Index by The Economist is described as a "lighthearted guide to whether currencies are at their correct level." The characterization fails to reflect the analytical significance of a price series that has spanned more than four decades and has tracked real purchasing power disparities with considerable accuracy. In the case of Azerbaijan during August 2026, the tale told is not so light and not quite heart-warming for those who want to know what is wrong with the structural position of the manat: at 7.25 manats versus $6.22 for a Big Mac in the United States, the purchasing power parity exchange rate works out to be 1.17 manats to the dollar. The actual exchange rate is 1.70.
The discrepancy - a 31.4% undervaluation - has been narrowing through the year. However, it is still considerable and is part of a collection of macroeconomic statistics that make Azerbaijan's currency situation a very interesting one in emerging market monetary policy circles. This gap has closed by 4.8 percentage points since January, and 5.4 percentage points since H1 2025, owing to an interesting process: the rate of price inflation in Azerbaijan exceeds that of the United States.
The Big Mac Index in Azerbaijan increased by 9% between January and August 2026, compared to a lower rate of price increase in the USA. It should be noted that the convergence in question occurs due to the internal dynamics of price increases, and not through the nominal exchange rate adjustment since it has been fixed at 1.70 manats since March 2017 — that is, over nine years. According to the adjusted index, taking into account the disparity in GDP per capita, the underestimation is only 13.5%, a reasonable estimate for a middle-income commodity-exporting country with a managed currency.
It was 16.2% in January 2026. As much as the economy (as a field of study itself) likes coherence, at times, certain numbers are affected not only by practical reasons but also by psychological effects. In Azerbaijan, particularly since the two major devaluations, public perception of the manat has been conditioned by the idea that “devaluation can happen at any time.” The Big Mac Index offers an interesting perspective on the currency question.
While it captures certain aspects of purchasing-power parity, it should be considered alongside the practical fundamentals shaping the foreign-exchange market. The trade figures published by the State Customs Committee for the first seven months of the year are those that put the currency situation into focus. Foreign trade in Azerbaijan amounted to $29.2 billion in the period from January to July 2026 – 1.3% more compared to the same period a year ago.
Exports stood at $19.3 billion (+27% y-o-y). Imports were recorded at $9.9 billion (-27.4%). Consequently, the trade surplus of $9.46 billion is not a record technically – Azerbaijan had posted positive trade balances before.
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