тЦкя╕ПIs the weighted average of a country's currency in relation to an index or basket of other major currencies, adjusted for the effects of inflation.
тЦкя╕ПThis exchange rate is used to determine an individual country's currency value relative to the other major currencies in the index, such as the U.S. dollar, Japanese yen and the euro.
тЦкя╕П When the index of REER goes above 100 mark (with index of REER in base year =100), then the domestic currency is overvalued.
тЦкя╕ПHence, domestic prices are too high and domestic producers are not competitive.
тЦкя╕ПIf the REER is less than 100, then the domestic currency is undervalued.
тЦкя╕ПThe Indices of Real Effective Exchange rate in India are released by Reserve Bank of India.
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