Effective exchange rate of the Chinese yuan rises 7 percent
By John Liu, The China Post
December 18, 2013, 12:08 am TWN
TAIPEI, Taiwan -- The Bank for International Settlements (BIS) announced yesterday that between January and November, real effective exchange rate (REER) and nominal effective exchange rate (NEER) of the Chinese yuan rose 7 percent and 6.4 percent, respectively.
The currency's REER index in November was pegged at 117.8, a new record since 1994 and a 1.3-percent increase month-on-month.
The currency's NEER index in November was pegged at 113.39, which was close to the record high reached in July and a 1.17-percent increase month-on-month.
Chinese yuan's REER and NEER went up 2.2 percent and 1.7 percent, respectively, in 2012.
NEER is the unadjusted weighted average value of a country's currency relative to all major currencies being traded within an index or pool of currencies.
REER is the weighted average of a country's currency relative to an index or basket of other major currencies adjusted for the effects of inflation.
The euro (19.4 percent), U.S. dollar (19 percent) and Japanese yen (15.9 percent) have the highest weighting in relation to Chinese yuan's effective exchange rate. In addition, the South Korean won, New Taiwan dollar and British pound also have some weighting in relation to the Chinese yuan.
The Chinese yuan appreciated significantly against the greenback this year, with 6.11 Chinese yuan being exchanged for 1 U.S. dollar as of Dec. 11, the highest exchange rate for Chinese yuan since 2005.