Both Real and Nominal Effective Exchange Rates of Chinese Yuan in March Hit 30-Month Record Low
Yicai Global
/SOURCE : Yicai
Both Real and Nominal Effective Exchange Rates of Chinese Yuan in March Hit 30-Month Record Low

(Yicai Global) April 21 -- Both the real effective exchange rate (Reer) and nominal effective exchange rate (Neer) of the Chinese yuan in March hit 30-month record low, shows the latest data published by the Bank for International Settlements (BIS)

The real effective exchange rate of the Chinese yuan in March fell by 1.34 percent to 120.43, a record low in 30 months, and the yuan's nominal effective exchange rate also dropped by 0.59 percent to a 30-month record low of 116.66, the BIS said today.

A soaring real effective exchange rate represents an upsurge in the relative value of domestic currency, while a decline indicates depreciation. Obtained by removing inflation from the nominal effective exchange rate, the real effective exchange rate can better reflect the external value of a national currency. The smaller decline of the nominal effective exchange rate than the real effective one indicates that the overall inflation level in China is lower than those in comparable countries.

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Keywords: China , Business , Forex , Bis , Renminbi