Thursday, March 15, 2018

Effective Exchange Rate Indexes: February 2018 Update

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


This update is a little late for a few reasons. First, I was travelling the whole of last week, and simply hadn’t the time. Second, there were major updates to a few of the CPI series (changes of base years), including the one for Malaysia, that required rejigging the spliced deflator series.

On the whole though, the picture hasn’t changed much since December 2017. The Ringgit was still climbing against most currencies, which resulted in a continued increase in all of the indexes. On the year, the nominal broad index was up 5.3% in January and 6.4% in February, while the real broad index was up 3.9% and 6.3%. The picture was broadly the same across all the sub-indexes.

On a bilateral basis, the Ringgit was up against 14 currencies in January and 11 in February (relative to the 15 that make up the broad index). The biggest gains were against regional currencies, with the only net declines over Jan-18-Feb-18 recorded against the EUR, JPY and CNY.



  1. Indexes have been updated to February 2018
  2. CPI deflators and forecasts have been updated for January/Feburary 2018
  3. CPI deflator data revisions were required for Malaysia, Thailand, and the Phillippines. This required revisions to the indexes from Jan-17 onwards


  1. Do you take into consideration the deliberate devaluation of USD by Trump's administration?

    I wonder why even RTM & TV3 have sort of shy away from highlighting our neighbors' Baht, Rupiah & SGD exchange-rate, which are more 'dekat dihati Rakyat' especially those living in the border areas.(with Thailand, up north and Indonesia, especially along the borders of Sabah & Sarawak.)

    Rakyats living at the borders with Brunei can refer to SGD, since its currency was pegged... since 1965?
    In Thailand, they no longer accept Ringgit.

    1. @RD

      Sorry, late reply - I was travelling for almost the whole of March.

      1. The indexes are calculated using market exchange rates, so all movements are taken into account.

      2. Malaysia is the only net energy exporter in ASEAN with a floating exchange rate. Brunei is of course also an exporter, but as you point out, the currency is pegged to the SGD (actually, it's a currency union, but the effects are the same). The depreciation of the Ringgit is roughly equivalent to the currency depreciations of other energy exporters with floating currencies like Canada, Australia and Mexico.

      3. Lastly, international convertibility of the Ringgit was suspended in 1998, as part of the capital controls instituted by BNM, and has never been restored. Anybody (like money changers) who accept Ringgit outside of Malaysia take on a risk, because it will not be honoured by foreign banking and payment systems.