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Real effective exchange rate
42 trading partners - 3 year % change
The REER (Real Effective Exchange Rate) aims to assess a country's price or cost competitiveness relative to its principal competitors in international markets. Changes in cost and price competitiveness depend not only on exchange rate movements but also on cost and price trends. The specific REER for the Macroeconomic Imbalances Procedure is deflated by the consumer price indices relative to a panel of 42 countries (Double export weights are used to calculate REERs, reflecting not only competition in the home markets of the various competitors, but also competition in export markets elsewhere). A positive value means real appreciation.
The MIP scoreboard indicator is the percentage change over three years of the real effective exchange rate (REER) based on consumer price index deflators relative to 42 trading partners. The formula is: [[(REER_HICP_42)t - (REER_HICP_42)t-3] / (REER_HICP_42)t-3]*100
The indicative thresholds are +/-5% for euro area and +/-11% for non-euro area countries.
Data source: Directorate General for Economic and Financial Affairs (DG ECFIN).
Source: Eurostat, MIP indicators.