Real effective exchange rate
A currency's rate against a basket of trading partners' currencies, adjusted for the difference in inflation.
How to read the number
It measures the competitiveness of a country's goods: a nominal depreciation alongside high domestic inflation gives the exporter no real advantage.
When the metric lies
The basket and its weights are revised, and the inflation used comes from different countries' indices. Values from different sources or different periods are not directly comparable.
Also known as: trade-weighted exchange rate