PRELIMS
According to RBI data, the REER Index of the Rupee reached a record high of 108.14 in November 2024, reflecting a 4.5% increase during the year.
About Effective Exchange Rate (EER):
The Effective Exchange Rate (EER) gauges the value of a currency relative to a basket of other currencies. It provides insight into a country’s international competitiveness in terms of foreign exchange rates.
Nominal EER (NEER) adjusts nominal bilateral exchange rates by incorporating weighted trade data from the country’s trading partners. An increase in NEER signifies an appreciation of the Rupee.
Real EER (REER), on the other hand, factors in price level differences between trading partners. A rise in REER indicates a decline in trade competitiveness.