Page 132 - economic_survey_2021-2022

106 Economic Survey 2021-22

3.50 In terms of 6-currency nominal effective exchange rate (NEER) (trade-weighted), the rupee
depreciated by 2.1 per cent in December 2021 over March 2021, while it appreciated by 0.9 per
cent in terms of real effective exchange rate (i.e. REER) terms (Figure 19a). Similarly, the rupee
depreciated by 1.6 per cent in terms of 40-currency NEER (trade-weighted) in December 2021
over March 2021, while it appreciated by 0.4 per cent in terms of 40-currency REER, reflecting
widening inflation differential with trading partners (Figure 19b).

Figure 18: Movement of exchange rate against US dollar of
major EME* currencies (Nov 2021 over Nov 2020)

Turkey -34.4
Argentina -25.5
Sri Lanka -8.9 Appreciation
Thailand -8.7
Poland -7.2
Chile -6.5
Philippines -4.3
Brazil -2.3
Mexico -2.2
Malaysia -1.6
Indonesia -0.5
India -0.3
South Africa Depreciation 0.2
China D 3.2
Russia 5.3
-40 -30 -20 -10 0 10
Percentage Change
Source: Bank for International Settlements (BIS)
Note: *: EME: Emerging market economies

Figure 19: Index of 6-Currency and 40-Currency NEER and REER
(Trade Based Weight) (Base Year: 2015-16 =100)

a. 6-Currency b. 40-Currency
NEER REER (RHS) NEER REER (RHS)
96 106 98 108

92 104 96 106
104
Index 88 102 Index 94 102
100
84 92 100
98 98
80 96 90 96
Jan 2020 Mar 2020 May 2020 Jul 2020 Sep 2020 Nov 2020 Jan 2021 Mar 2021 May 2021 Jul 2021 Sep 2021 Nov 2021 Jan 2020 Mar 2020 May 2020 Jul 2020 Sep 2020 Nov 2020 Jan 2021 Mar 2021 May 2021 Jul 2021 Sep 2021 Nov 2021

Source: RBI