REERRRR…screech. REER’s are always on the move. What a life.
The real effective exchange rate (REER) is a way to compare currencies of different countries. REER is the weighted average of one currency compared to a group of other nations’ currencies, adjusting for inflation and trade.
REER allows us to see which countries are gaining a competitive edge on others, and which are falling behind. A lot of this has to do with each country’s trade game. It’s like the Olympics of international currency. You can watch it live at the World Bank. Okay, you can’t watch it live, but the World Bank does publish REERs on the reg.
The biggest stars of the REER games? The U.S. dollar, the Japanese Yen, and the Eurozone Euro.
If you’re looking for investing parameters, you can skip REER and just head straight to currency exchanges. REER is more for governments comparing themselves to each other, which isn’t as helpful as the pure currency exchange rates for traders.
Related or Semi-related Video
Finance: What Is a Real Return?67 Views
finance- a la shmoop. what is a real return? like is there a fake return? you
know like the news? well kinda .real return refers to an [man frowns talking to camera]
investment return mapped against inflation. so let's say you invest in a
bond that pays five percent a year for ten years and then pays you back your
principal .boring but nice- you know like a good doctor visit. your nominal return
over that period was 5% but since inflation was 3% a year during that
period on average your real return was only 2% a year- meaning that the
performance of your investment only eked out a 2% net gain against the price of [equation]
milk gas and you know knocked off iPhones. so don't be a chump who thinks
that they're making more money than they really are, and you know keep on keeping
it real. [man sitting in chair, talks to camera]
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