Nominal and Real Effective Exchange Rate of Rupee from 2004-05 to 2013-14

The Nominal Effective Exchange Rate (NEER) is the weighted geometric average of bilateral nominal exchange rates of the home currency in terms of foreign currencies. The Real Effective Exchange Rate (REER) is defined as a weighted average of nominal exchange rates adjusted by the ratio of domestic price to foreign prices i.e. adjusted for relative price differential between the domestic and foreign countries; and relates to the purchasing power parity (PPP) hypothesis. NEER and REER  have been calculated with reference to the six-currency indices representing the US, the Euro zone, UK, Japan, China and Hong Kong SAR i.e. US Dollar, Euro, Pound, Yen, Yuan and Hong Kong Dollar respectively.

Nominal Effective Exchange Rate (NEER) Index was 103 in the year 2005-06. It increased by 3 points as compared to the year 2004-05. Real Effective Exchange Rate (REER) Index was 104.4 in the year 2005-06. It increased by 4.4 points as compared to the year 2004-05.

NEER Index was 98.1 in 2006-07. It decreased by -4.9 points as compared to 2005-06. REER Index was 103.8 in 2006-07. It decreased by -0.6 points as compared to 2005-06. NEER Index was 104.6 in 2007-08. It increased by 6.5 points as compared to 2006-07. This was the maximum increase recorded in NEER during the period from 2004-05 to 2013-14. REER Index was 113.4 in 2007-08. It increased by 9.6 points as compared to 2006-07. NEER Index was 90.4 in 2008-09. It decreased by -14.2 points as compared to 2007-08. REER Index was 103.9 in 2008-09. It decreased by -9.5 points as compared to 2007-08. This year had the maximum decrease recorded in NEER as well as REER during the period from 2004-05 to 2013-14.

NEER Index was 87.1 in 2009-10. It decreased by -3.3 points as compared to 2008-09. REER Index was 110.7 in 2009-10. It increased by 6.8 points as compared to 2008-09. NEER Index was 91.8 in 2010-11. It increased by 4.7 points as compared to 2009-10. REER Index was 124.5 in 2010-11. It increased by 13.8 points as compared to 2009-10. This was the maximum increase recorded in REER during the period from 2004-05 to 2013-14.

NEER Index was 84.4 in 2011-12. It decreased by -7.4 points as compared to 2010-11. REER Index was 121.2 in 2011-12. It decreased by -3.3 points as compared to 2010-11. NEER Index was 75.5 in 2012-13. It decreased by -8.9 points as compared to 2011-12. REER Index was 117.1 in 2012-13. It decreased by -4.1 points as compared to 2011-12. NEER Index was 67.7 in 2013-14. It decreased by -7.8 points as compared to 2012-13. REER Index was 112.7 in 2013-14. It decreased by -4.4 points as compared to 2012-13.

Note: Original Source: Reserve Bank of India and also published in statistical year book 2015 by MOSPI. Data values are on (Base: 2004-05 =100).