Download Nominální efektivní kurz koruny

Source: The ARAD time series database. Copyright(c) Czech National Bank
METHODOLOGICAL SHEET
REAL EFFECTIVE EXCHANGE RATE OF THE KORUNA
DEFLATED BY GDP DEFLATOR
I. Definition and content
The real effective exchange rate of the CZK (REER) is one of the indicators of the
international competitiveness of a country and is generally understood to mean various levels
of relative price or costs expressed in a certain currency. In this respect, REER values above
100 signify a downward trend in the country’s competitiveness relative to the base period,
whereas an REER below 100 means rising competitiveness of the country relative to the
base period.
For computation of the REER was used the weighted geometric average of the ratio of the
nominal exchange rate index to GDP deflator differential with weights given by the shares of
the nation’s largest trading partners in trade turnover.
The framework of the real effective exchange rate of the koruna employs the GDP deflators
of 11 countries out of eurozone plus all eurozone countries. For the calculations
the eurozone countries are identified as a single currency area. The number of eurozone
countries corresponds to the actual state. In the first variant, the weights relate to the overall
trade turnover, whereas in the second variant the weights relate only to the turnover in SITC
groups 5–8.
The time series base is the average of 2010.
II.Sources
For the calculation of the real effective exchange rate are used as deflators GDP indices
obtained for all countries from ECB statistics. GDP indices are converted into 2010 base.
The nominal exchange rate indices are taken from the CNB’s own nominal effective
exchange rates (NEER) calculations.
III. Breakdown
For both, the first and second variants, the quarterly REER index is calculated based on
average of 2010 adjusted by GDP deflators.
Source: The ARAD time series database. Copyright(c) Czech National Bank
IV. Method of calculation
Weights of monetary areas calculated by share of
total trade turnover of the Czech Republic
Weights of monetary areas calculated by share of
total trade turnover of the Czech Republic for SITC
Variant I.
Monetary area
1 Euro area
2 Poland
3 United Kingdom
4 USA
5 Japan
6 Hungary
7 Switzerland
8 Sweden
9 Denmark
10 China
11 South Korea
12 Romania
Total
groups 5-8
Variant II.
Monetary area
1 Euro area
2 Poland
3 United Kingdom
4 USA
5 Japan
6 Hungary
7 Switzerland
8 Sweden
9 Denmark
10 China
11 South Korea
12 Romania
Total
in %
2010
68,5
7,3
4,1
2,3
1,6
2,6
1,6
1,5
0,8
7,6
1,1
1,0
100,00
in %
2010
67,6
6,5
4,3
2,5
1,8
2,5
1,7
1,6
0,8
8,4
1,2
1,1
100,00
Formula for the calculation of the real effective exchange rate index:
S
REER t  100   
i 1  P
n
*
it
*
it



wi*
where
Sit* - basic index of the domestic currency to the currency of the i-th trading partner in the
period t
Pit* - ratio of the basic GDPD Index of the i-th trading partner in the period t to the basic
GDPD Index of the Czech Republic in period t, the base year being the same as for the
calculation of Si*
wi* - standardised weights of the currency of the i-th trading partner
V. Changes in methodology and content
As of March 2012 the time series base is changed to the average of 2010. Next change in
the basis to the average of 2015 will be made in 2017 together with the change in weights of
foreign trade used in NEER.
VI. Reporting entities
None.