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The real exchange rate based on constant price to eliminate the effect of price change

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14y ago

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Why is RER rough?

The Real Exchange Rate (RER) can be considered rough because it reflects the relative price levels between two countries and can fluctuate due to various factors such as inflation rates, productivity changes, and exchange rate movements. These factors can make it challenging to precisely determine the true purchasing power parity between two currencies, leading to a rough estimate in RER calculations.


What is the function RER?

The RER, or Real Effective Exchange Rate, measures the value of a country's currency relative to a basket of other currencies, adjusted for inflation differences. It provides insights into a country's international competitiveness by reflecting how its currency's value changes against others over time, considering both nominal exchange rates and price levels. A rising RER could indicate that a country's goods are becoming more expensive relative to others, potentially impacting exports. Conversely, a falling RER suggests increased competitiveness in global markets.


What is REER in exchange rate?

The real effective exchange rate based on real exchange instead of nominal exchange rate in foreign currency exchange.


How do you calculate exchange rate?

The spot exchange rate refers to the current exchange rate. The forward exchange rate refers to an exchange rate that is quoted and traded today but for delivery and payment on a specific future date.


What is an unfavorable exchange rate?

unfavourable exchange rate movement


What will be the estimated exchange rate in 2010?

The Exchange Rate is 6594.232$.


Which exchange rate is following by India?

Floating Exchange Rate


Difference between Spot Exchange Rate and Exchange rate?

An exchange rate, which is also called the foreign-foreign exchange rate, is the rate that currency will be exchanged for another currency and may have a forward contract. The spot exchange rate is the current exchange rate today with immediate delivery and it is also called benchmark rates and outright rates.


What causes exchange rate fluctuations?

what are the causes of fluctuations in the exchange rate


Which foreign exchange system has the highest foreign exchange rate?

The Zimbabwean has the highest foreign exchange rate.


When the exchange rate is stated in terms of dollars per euro, undervaluation of the euro relative to the dollar would mean:O Market exchange rate < PPP based Exchange rateO Market exchange rate > PPP based exchange rate?

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What is forward rate?

Forward exchange rate is the agreed upon exchange rate to be used in a forward trade.