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Real Exchange Rates

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Real exchange rates
Exchange rates that have been adjusted for the inflation differential between two countries.
Real Exchange Rates
The purchasing power of two currencies relative to one another. While two currencies may have a certain exchange rate on the foreign exchange market, this does not mean that goods and services purchased with one currency cost the equivalent amounts in another currency. This is due to different inflation rates with different currencies. Real exchange rates are thus calculated as a nominal exchange rate adjusted for the different rates of inflation between the two currencies. See also: Purchasing power parity.
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The countries with fixed exchange rates, including Latvia, face difficulties because they must adjust their real exchange rates through domestic wages and prices.
Expected growth next year to remain fragile, says EBRD by The Baltic Times (Riga, Latvia)
Aa Saif stressed on the importance of stabilizing real exchange rates at a sustainable level.
UNCTAD projects slow economic growth in developed countries in 2010 by The Daily Star (Beirut, Lebanon)
INTRODUCTION The emerging economies experienced major instability of currencies and real exchange rates (RER) fluctuations.
Exchange rates misalignment in Asian emerging economies by Amor, Thouraya H.; Sarkar, Amin U. / Indian Journal of Economics and Business
 
 
 
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