Real effective rate of Azerbaijani manat increased

Baku. 6 June. REPORT.AZ/ The real effective rate of the Azerbaijani manat made 92,2 % points as of May 1, 2018. Report informs citing the Central Bank of Azerbaijan (CBA), this is by 0,8 % points higher than the figure on April 1. Compared with the indicator for the beginning of the year, the real effective rate fell by 2.0 % points and 3.4% during one year The decline in the real effective rate means that the manat is cheaper relative to the currencies of the trading partner countries.

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.