Effective exchange rate indices (ert_eff)

Reference Metadata in Euro SDMX Metadata Structure (ESMS)

Compiling agency: Eurostat, the statistical office of the European Union

Eurostat metadata
Reference metadata
1. Contact
2. Metadata update
3. Statistical presentation
4. Unit of measure
5. Reference Period
6. Institutional Mandate
7. Confidentiality
8. Release policy
9. Frequency of dissemination
10. Accessibility and clarity
11. Quality management
12. Relevance
13. Accuracy
14. Timeliness and punctuality
15. Coherence and comparability
16. Cost and Burden
17. Data revision
18. Statistical processing
19. Comment
Related Metadata
Annexes (including footnotes)

For any question on data and metadata, please contact: EUROPEAN STATISTICAL DATA SUPPORT


1. Contact Top
1.1. Contact organisation

Eurostat, the statistical office of the European Union

1.2. Contact organisation unit

Unit C2: National accounts production

1.5. Contact mail address

2920 Luxembourg LUXEMBOURG

2. Metadata update Top
2.1. Metadata last certified 24/10/2017
2.2. Metadata last posted 24/10/2017
2.3. Metadata last update 24/10/2017

3. Statistical presentation Top
3.1. Data description

Nominal effective series measure changes in the value of a currency against a trade-weighted basket of currencies. A rise in the index means a strengthening of the currency.

Real effective series are a measure of the change in competitiveness of a country or geographical area, by taking into account the change in costs or prices relative to other countries. A rise in the index means a loss of competitiveness.

The collection comprises industrial countries' effective exchange rates. It is produced by the European Commission (DG ECFIN).

3.2. Classification system

Data follow a DG ECFIN methodology : see file in Annex.

3.3. Coverage - sector

Not applicable.

3.4. Statistical concepts and definitions

Nominal effective exchange rate (NEER)

The NEER (or "Trade-weighted currency index") of a country or geographical area aims to track changes in the value of that country's currency relative to the currencies of its principal trading partners. It is calculated as a weighted geometric average of the bilateral exchange rates against the currencies of competing countries.

Real effective exchange rate (REER)

Changes in cost and price competitiveness depend not only on exchange rate movements but also on cost and price trends. The REER (or "Relative price and cost indicators") aims to assess a country's (or geographical area's) price or cost competitiveness relative to its principal competitors in international markets. It corresponds to the NEER deflated by nominal unit labour costs (total economy) or consumer prices (CPI/HICP). For the REER two different rates are shown:

  • CPI (consumer price index) - deflated real effective exchange rates
  • ULCT (unit labour costs in the total economy) - deflated real effective exchange rates.

NEER and REER data are presented in the form of indices. Quarterly and yearly data are means of the monthly figures. Series available correspond to four different trade-weighted baskets of competitor countries:

  • EA19= Euro-area Member States
  • EU28 = EU Member States
  • IC37 = EU28 + 9 other industrial countries (Australia, Canada, United States, Japan, Norway, New Zealand, Mexico, Switzerland and Turkey)
  • Broad group (42) = IC37 + 5 other industrial countries (Russia, China, Brazil, South Korea and Hong Kong). For the broad group only HICP/CPI deflated REER are available.
3.5. Statistical unit

Index 2010 = 100.

3.6. Statistical population

Industrial countries.

3.7. Reference area

EU28, Euro area, EU Member States, Turkey, Norway, Switzerland, Canada, United States, Mexico, Japan, Australia, New Zealand, Brazil, China, South Korea, Hong Kong, Russia.

3.8. Coverage - Time

Series start in 1994.

3.9. Base period

Average of 2010 = 100.

4. Unit of measure Top


5. Reference Period Top

Month, quarter, year.

6. Institutional Mandate Top
6.1. Institutional Mandate - legal acts and other agreements

Use in economic analyses and forecasts of the European Commission. Inclusion of REER in the list of indicators for the Macroeconomic Imbalance Procedure (MIP) and also as a Sustainable Development Indicator (SDI).

6.2. Institutional Mandate - data sharing

Under a memorandum of understanding, the MIP indicators are shared with the European Central Bank.

7. Confidentiality Top
7.1. Confidentiality - policy

Regulation (EC) No 223/2009 on European statistics (recital 24 and Article 20(4)) of 11 March 2009 (OJ L 87, p. 164), stipulates the need to establish common principles and guidelines ensuring the confidentiality of data used for the production of European statistics and the access to those confidential data with due account for technical developments and the requirements of users in a democratic society.

7.2. Confidentiality - data treatment

Not applicable.

8. Release policy Top
8.1. Release calendar

Not applicable.

8.2. Release calendar access

Not applicable.

8.3. Release policy - user access

In line with the Community legal framework and the European Statistics Code of Practice Eurostat disseminates European statistics on Eurostat's website (see item 10 - 'Accessibility and clarity') respecting professional independence and in an objective, professional and transparent manner in which all users are treated equitably. The detailed arrangements are governed by the Eurostat protocol on impartial access to Eurostat data for users.

9. Frequency of dissemination Top

Each quarter.

10. Accessibility and clarity Top
10.1. Dissemination format - News release

Not applicable.

10.2. Dissemination format - Publications

Quarterly Report by DG ECFIN on their website: http://ec.europa.eu/economy_finance/db_indicators/competitiveness/index_en.htm

10.3. Dissemination format - online database

See the exchange rates collection in Eurostat's on-line database.

10.4. Dissemination format - microdata access

The weights used in the effective exchange rate calculations are disseminated on the DG ECFIN website.

10.5. Dissemination format - other


10.6. Documentation on methodology

See DG ECFIN methodology in Annex below.

10.7. Quality management - documentation

Eurostat's mission is to provide the European Union with a high-quality statistical information service (see ESS quality framework)

11. Quality management Top
11.1. Quality assurance

The entire dataset is recalculated and checked every quarter, as component series are frequently revised.

11.2. Quality management - assessment

Not available.

12. Relevance Top
12.1. Relevance - User Needs

The NEER tracks changes in the value of acountry's currency relative to the currencies of its principal trading partners. The REER is used as competitiveness indicator. The series are used in European Commission economic analyses and forecasts. The REER is also included in the MIP indicators.

12.2. Relevance - User Satisfaction

No information available.

12.3. Completeness

The data are calculated for all the countries and areas included covering the entire time span i.e. starting 1994.

13. Accuracy Top
13.1. Accuracy - overall

Due to frequent updates of the basic data even historic data change frequently, ensuring accuracy over the time series. 

There is no standard methodology available. As a result effective exchange rate collections can vary between different compilers: DG ECFIN, ECB, IMF and others.

13.2. Sampling error

Not applicable.

13.3. Non-sampling error

Not available. Errors cannot be ruled out in the basic data sources or the compilation process.

14. Timeliness and punctuality Top
14.1. Timeliness

Depending on the availability of the basic data around T+4 months after the reference period.

14.2. Punctuality

A delay may occur if basic data are not available.

15. Coherence and comparability Top
15.1. Comparability - geographical

Due to use of an index with base period, caution must be used for any geographical comparison. In terms of methodology, geographical comparability is reasonable.

15.2. Comparability - over time

Although the comparability over time of the data can be considered as very high, methodological changes occur and have a limited effect on the overall pattern of REER indicators. Each time these occur, recalculations under the new definitions are performed for the whole time series, safeguarding time series without break.

15.3. Coherence - cross domain

The series should be coherent with the component data from other domains. However, there is no standard methodology for producing NEER and REER statistics.

15.4. Coherence - internal

The series should be coherent with the component data.

16. Cost and Burden Top

Not applicable: no separate collection of data is involved, only the compilation and dissemination.

17. Data revision Top
17.1. Data revision - policy

Policy is to update the full series each quarter. Changes in methodology may occur, in particular the addition of new countries in the compilation process.

17.2. Data revision - practice

Data are not marked as provisional but are subject to revision. Revisions are frequent i.e. every quarter.

18. Statistical processing Top
18.1. Source data

The source for the effective exchange rate collection is DG ECFIN of the European Commission.
Concerning component data, bilateral exchange rates for the current year are the official daily rates recorded at 14.15 hours by the ECB. Historical exchange rates are provided by the IFS (IMF) database. For the period before 1999, a weighted average of the currencies of the Member States now participating in the euro area is used as a proxy for the euro.

Weights are derived using data on bilateral exports from the IMF DoT database and on domestic production from national accounts.

For further details, see the methodology of DG ECFIN.

18.2. Frequency of data collection

Calculation is quarterly.

18.3. Data collection

See DG ECFIN methodology in Annex.

18.4. Data validation

Data can be checked with DG ECFIN.

18.5. Data compilation

The EU28 and euro-area aggregate are calculated by taking as weights each country's share of extra-EU or extra-EMU trade. Double export weights are used to calculate NEER and REER, reflecting not only competition in the home markets of the various competitors, but also competition in export markets elsewhere. Note that the series for individual euro-area countries continue beyond the establishment of the monetary union: their effective exchange rates will continue to vary because of differing trade patterns and cost or price trends.

18.6. Adjustment


19. Comment Top

Real effective exchange rates indices with the following deflators are available on demand:

  • The GDP deflator (market prices).
  • The price deflator of exports of goods and services.

Related metadata Top

Annexes Top
DG ECFIN methodology