Monday, August 7, 2017

Effective Exchange Rate Indexes: July 2017 Update

The NEER and REER page has been updated, as has the Google Docs version.


After two months of gains, the Ringgit has reversed course, seeing declines across all six indexes. The REER is roughly where it was back in December, though the NEER managed to hold on to some gains, and is only slightly below November’s level. Overall, most of the indexes lost about -0.80% for July versus June, except for the narrow REER, which lost a little over -1.03%.

On a bilateral basis, losses were recorded against 12 out of the 15 currencies tracked. The biggest losses were against the AUD (-3.44%), the EUR (-2.85%) and the GBP (-1.73%), with the only gains recorded against the PHP (1.16%), the JPY (1.04%) and the TWD (a marginal 0.13%).



  1. Indexes have been updated to July 2017
  2. CPI deflators and forecasts have been updated for June/July 2017


  1. Interesting that your NEER and REER has reconverged as inflation slowed down. What do you think about REER mean reversion that some FX analysts use for valuation? -MN

    1. @MN

      It's a useful rule of thumb if you have nothing better. There's two weaknesses though:

      1. This assumes the exchange rate was near equilibrium during the base year

      2. It also ignores interest rate differentials, which can materially alter the picture