Blog Post

Recent real effective exchange rate movements (summer 2013 database update)

We have updated the monthly database up to July 2013, which is downloadable form the website of the working paper.

By: and Date: August 13, 2013 Topic: Global Economics & Governance

Bruegel Working Paper 2012/06 includes annual consumer price index based real effective exchange rate data for 178 countries and the euro area, while the monthly database includes 153 countries and the euro area.

We have updated the monthly database up to July 2013, which is downloadable from the website of the working paper.

Let us highlight one figure here, which is updated from our earlier blog post assessing the implications of the weakening Yen. Our conclusion remained broadly the same: while the speed of yen depreciation has been rather fast since the autumn 2012, the depreciation has only corrected the yen’s appreciation since the global financial crisis erupted. The current value of the yen’s REER is similar to its value in 1980. In contrast, Korea’s REER is still much weaker now than it was both in 2007 and in 1980. The Chinese renminbi continued to appreciate during the past 12 months by gaining 9 percent in real effective terms, and the euro also appreciated by 7 percent during the 12 months. The latter will make it much more difficult for euro-area members to achieve a sustainable intra-euro rebalancing. The US dollar appreciated by only 2 percent in real effective terms during the past 12 months, despite the talks about QE exit.

Monthly CPI-based real effective exchange rates, January 1980 – July 2013 (December 2007=100)

Source: our updated database for 1995-2013; in the pre-1995 period, the OECD’s REER for the US, Euro area, Japan and Korea, and the IMF’s REER for China are chained backward.

The figure below shows our updated monthly REER series for all countries included in our database* for January 1995-July 2013, in comparison with data from World Bank, Eurostat, BIS and OECD (whenever available). Note that our indicator is calculated against 138 trading partners, many more than in any of the other databases.

a: Monthly CPI-based real effective exchange rates, January 1995 – July 2013 (December 2007 = 100)

b: Monthly CPI-based real effective exchange rates, January 1995 – July 2013 (December 2007 = 100)

c: Monthly CPI-based real effective exchange rates, January 1995 – July 2013 (December 2007 = 100)

d: Monthly CPI-based real effective exchange rates, January 1995 – July 2013 (December 2007 = 100)

e: Monthly CPI-based real effective exchange rates, January 1995 – July 2013 (December 2007 = 100)

f: Monthly CPI-based real effective exchange rates, January 1995 – July 2013 (December 2007 = 100)

g: Monthly CPI-based real effective exchange rates, January 1995 – July 2013 (December 2007 = 100)

h: Monthly CPI-based real effective exchange rates, January 1995 – July 2013 (December 2007 = 100)

i: Monthly CPI-based real effective exchange rates, January 1995 – July 2013 (December 2007 = 100)

* For the time being, we removed Myanmar from the database, because Myanmar maintained a multiple exchange rate system and we do not have a consistent time series for the exchange rate. We will report again data for Myanmar when we obtain such a consistent time series. 


Republishing and referencing

Bruegel considers itself a public good and takes no institutional standpoint. Anyone is free to republish and/or quote this post without prior consent. Please provide a full reference, clearly stating Bruegel and the relevant author as the source, and include a prominent hyperlink to the original post.

View comments
Read article More by this author

Opinion

China Fails to Woo U.S. With Financial Sector Opening

China's recent announcement of reforming its financial market has received little enthusiasm from the U.S. despite its potential benefits. The lack of a clear agenda regarding its economic rival has pushed the Trump administration to minor any significant progress of China's reform, and to maintain focus on strategic issues.

By: Alicia García-Herrero Topic: Finance & Financial Regulation, Global Economics & Governance Date: January 5, 2018
Read article

Opinion

Chinese banks’ improved asset quality cannot hide other phantoms

The recent improvement in asset quality cannot mask other growing concerns in China’s banking sector. Beyond liquidity concerns, other structural issues such as low profitability and insufficient generation of organic capital, are emerging.

By: Alicia García-Herrero and Gary Ng Topic: Finance & Financial Regulation, Global Economics & Governance Date: December 20, 2017
Read article Download PDF More on this topic

External Publication

Central Asia—twenty-five years after the breakup of the USSR

Central Asia consists of five culturally and ethnically diverse countries that have followed different paths to political and economic transformation in the past 25 years. The main policy challenge for the five Central Asian economies is to move away from commodity-based growth strategies to market-oriented diversification and adoption of a broad spectrum of economic, institutional and political reforms

By: Marek Dabrowski and Uuriintuya Batsaikhan Topic: Global Economics & Governance Date: November 14, 2017
Read article More by this author

Blog Post

European worries about isolationist trends

Populist shocks in the UK and US threaten the multilateral order on which the EU depends. What lies behind these earthquakes, and what does it mean for Europe? Withdrawing from the world is no solution to geo-political upheavals, but Europe needs to reassess the future of globalisation.

By: Maria Demertzis Topic: European Macroeconomics & Governance, Global Economics & Governance Date: November 7, 2017
Read article More on this topic More by this author

Blog Post

Long-term growth potential, or dead in the long run?

By linking growth with both employment and the imperative for India to hold its own with China for strategic autonomy, Prime Minister Modi has brought sustainable, high quality, inclusive economic growth to the centre of political discussion, which is where it rightfully belongs.

By: Suman Bery Topic: Global Economics & Governance Date: October 5, 2017
Read article More on this topic More by this author

Blog Post

Chinese banks: An endless cat and mouse game benefitting large players

As deleveraging moves up in the scale of objectives of the Chinese leadership, banks now face more restrictions from regulators. As a result, banks have been very creative in playing the cat and mouse game in front of evolving regulations.

By: Alicia García-Herrero Topic: Global Economics & Governance Date: September 26, 2017
Read article Download PDF

Policy Contribution

Capital Markets Union and the fintech opportunity

Fintech has the potential to change financial intermediation structures substantially. It could disrupt existing financial intermediation with new business models empowered by intelligent algorithms, big data, cloud computing and artificial intelligence. Policymakers need to consider four questions urgently: Develop a European or national fintech market? What regulatory framework to pursue? Should supervision of fintech be exercised at the European level? What is the overall vision for the EU’s financial system?

By: Maria Demertzis, Silvia Merler and Guntram B. Wolff Topic: Finance & Financial Regulation, Innovation & Competition Policy Date: September 15, 2017
Read article More on this topic More by this author

Opinion

Is China Deleveraging? Too Early to Cheer

This blog post was originally published on BRINK “Deleveraging” is the new buzzword in China. The leadership clearly wants to scale back its epic borrowing, but it is not necessarily ready to pay the price for it, namely, the price of having less support for growth. The question is whether the recent efforts of China’s leadership to […]

By: Alicia García-Herrero Topic: Global Economics & Governance Date: September 13, 2017
Read article More by this author

Podcast

Podcast

Surprising priorities for Europe and China

Bruegel’s Alicia García-Herrero and Robin Niblett of Chatham House discuss a new joint report on EU-China relations. How easy was it to find common ground with Chinese partners? And what should be the priorities for economic cooperation between Europe and China?

By: The Sound of Economics Topic: Global Economics & Governance Date: September 13, 2017
Read about event More on this topic

Past Event

Past Event

EU-China economic relations: looking to 2025

This event will see the launch of a report on EU-China relations and discuss issues such as trade and investment, industrial cooperation and innovation and global governance

Speakers: Victor Chu, Ian Davis, Alicia García-Herrero, Dame Clara Furse, Tony Graziano, Anatole Kaletsky, K.C. Kwok, Lawrence J. Lau, Ina Lepel, Hanna Müller, André Sapir, Robin Niblett, György Szapáry, Jean-Claude Trichet, Zhang Yansheng, H.E. Ambassador Yang Yanyi, Liu Xiangdong, Gunnar Wiegand, Guntram B. Wolff, Huang Ping and Elena Flores Topic: Global Economics & Governance Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: September 13, 2017
Read article Download PDF More on this topic

Book/Special report

EU–China Economic Relations to 2025. Building a Common Future

The EU and China, as the world’s second and third largest economies, share a responsibility in upholding the rules-based, global free trade system and other forms of multilateral cooperation, especially on combating climate change. This report sets out the main conclusions of a research project between European and Chinese think-tanks, which addresses the prospects for the EU–China economic relationship. A Joint Report by Bruegel, Chatham House, the China Center for International Economic Exchanges and the Institute of Global Economics and Finance at The Chinese University of Hong Kong.

By: Alicia García-Herrero, K.C. Kwok, Tim Summers, Liu Xiangdong and Zhang Yansheng Topic: Global Economics & Governance Date: September 13, 2017
Read article More on this topic More by this author

Opinion

Hong Kong should add the euro to its dollar peg

Volatility offers an opportunity for the territory to rethink its strategy. With the economy now more synchronised with China than ever before, the dollar peg may no longer provide an accurate reflection of the real value of the Hong Kong dollar.

By: Alicia García-Herrero Topic: Global Economics & Governance Date: September 12, 2017
Load more posts