Baku. 3 July. REPORT.AZ/ The real effective rate of the Azerbaijani manat made 94,8 % points as of June 1, 2018. Report informs citing the Central Bank of Azerbaijan (CBA), this is by 2,6 % points higher than the figure on May 1. Compared with the indicator for the previous year it increased by 2.0 % points.
The reason for the increase in the real effective exchange rate is the decline of the national currencies of the major trading partners of Azerbaijan against US dollar.
Notably, real effective exchange rate of Azerbaijani manat is calculated since 2000; its lowest rate was 74.2 in 2004, the highest was 153.1 in 2015. The lowest reported rate after beginning of financial crisis was 87 on September 1, 2016.
Notably, real effective exchange rate measures the value of a currency against a basket of other currencies; it takes into account changes in relative prices and shows what can actually be bought. An increase in REER implies that exports become more expensive and imports become cheaper; therefore, an increase indicates a loss in trade competitiveness.