The Rupee’s Real Effective Exchange Rate (REER) rose to 108.14 in November, according to a report by the Reserve Bank of India (RBI)

The Real Effective Exchange Rate (REER) of the rupee rose to 108.14 in November, up from 107.20 in October, marking an appreciation of 0.9 percent.

This nominal appreciation was sufficient to offset the impact of unfavorable price differences, as per the report titled ‘Real Effective Exchange Rate and its Implications for India’s Trade Balance’, authored by Reserve Bank of India staff. It is important to note that the views expressed in the article are those of the authors, not the RBI.

REER reflects the inflation-adjusted, trade-weighted average value of a currency relative to its trading partners, and is commonly used to gauge a country’s external competitiveness.

In November, emerging market currencies faced pressure due to foreign portfolio investor outflows, a strengthening US dollar, and rising US yields. The rupee depreciated by 0.4 percent month-on-month against the dollar, a relatively modest decline compared to other major currencies.

Despite increased global uncertainties, the rupee showed the least volatility among major currencies.