Real Exchange Rate Calculator
Calculate a bilateral real exchange rate from a domestic-per-foreign nominal rate and comparable price indices.
e must be positive and quoted as domestic currency per one foreign currency. Use positive indices of the same type, common base period and observation period; never mix CPI and PPI. This is bilateral RER, not a trade-weighted effective rate. Index-based levels do not establish purchasing power parity, overvaluation or trading advice. A rise means real depreciation under this quotation, holding definitions fixed.
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Conceptual reference: IMF
A QUICK WALKTHROUGH
How to use this tool
- Calculate a bilateral real exchange rate from a domestic-per-foreign nominal rate and comparable price indices.
- e must be positive and quoted as domestic currency per one foreign currency. Use positive indices of the same type, common base period and observation period; never mix CPI and PPI. This is bilateral RER, not a trade-weighted effective rate. Index-based levels do not establish purchasing power parity, overvaluation or trading advice. A rise means real depreciation under this quotation, holding definitions fixed.
- Calculate
Formula
RER = e × P* / P.
Assumptions and limits
e must be positive and quoted as domestic currency per one foreign currency. Use positive indices of the same type, common base period and observation period; never mix CPI and PPI. This is bilateral RER, not a trade-weighted effective rate. Index-based levels do not establish purchasing power parity, overvaluation or trading advice. A rise means real depreciation under this quotation, holding definitions fixed.
Local processing
Inputs stay in this browser; no data is fetched.
GOOD TO KNOW
Common questions
Assumptions and limits
e must be positive and quoted as domestic currency per one foreign currency. Use positive indices of the same type, common base period and observation period; never mix CPI and PPI. This is bilateral RER, not a trade-weighted effective rate. Index-based levels do not establish purchasing power parity, overvaluation or trading advice. A rise means real depreciation under this quotation, holding definitions fixed.