Countries by Real effective exchange rate index (2010 = 100)

Ranking 2024

Analysis

The real effective exchange rate (REER) index measures the value of a currency against a weighted average of several foreign currencies, adjusted for relative price levels. As defined by the World Bank: 'Real effective exchange rate is the nominal effective exchange rate (a measure of the value of a currency against a weighted average of several foreign currencies) divided by a price deflator or index of costs.' All values are indexed to 2010=100, meaning a value above 100 indicates the currency has appreciated in real terms since 2010, while a value below 100 indicates depreciation. The indicator code is PX.REX.REER. This ranking covers 95 countries, with 94 of 95 (98.9%) having data from the last seven years and 100% of datapoints classified as official-quality. Six extreme outliers were identified using a 3-standard-deviation threshold.

The top of the ranking is dominated by countries with severe inflation histories or currencies pegged to appreciating anchors. Venezuela (Rank 1, 741.70) and Iran (Rank 2, 625.71) stand far above all others, with values that reflect extreme domestic price changes relative to their 2010 baselines. Moldova (Rank 3, 180.67) and Bolivia (Rank 4, 156.58) follow at considerably lower but still elevated levels. Further down, Korea (Rank 7, 138.97), Iceland (Rank 8, 137.80), and the United States (Rank 9, 130.60) rank among the highest of the major economies, reflecting sustained real currency strength since 2010.

The middle of the ranking clusters near the 100 baseline, as expected given that 2010 is the index reference year. Mexico (Rank 57, 100.21) and Nicaragua (Rank 55, 100.96) sit almost exactly at par. Several advanced European economies fall below 100, including Germany (Rank 61, 97.48), France (Rank 73, 91.97), and Greece (Rank 79, 87.35), indicating real depreciation since 2010. Japan ranks last at 95th with a value of 55.02, the furthest below the 2010 baseline of any country in the dataset. Brazil (Rank 94, 60.70), Nigeria (Rank 93, 63.92), and Ghana (Rank 92, 67.82) also show substantial real depreciation. A counterintuitive placement is Ireland (Rank 75, 88.81), which despite strong nominal economic growth sits well below the index baseline.

This metric has important limitations. Because REER is an index anchored to 2010, rankings reflect change relative to that base year rather than absolute currency strength or purchasing power. Countries with high inflation in 2010 or before may show distorted trajectories. The 1,248% spread between Venezuela (741.70) and Japan (55.02) flags six extreme outliers at the 3-sigma level, which can compress the apparent differences among the majority of countries. REER values also depend on the trade-weighting methodology and the price deflators used, which can vary by source. Countries with managed or non-convertible currencies may have official REER figures that diverge from market-implied rates. One country in the dataset has a data point older than seven years, and users should verify the precise reference year for each country before drawing time-sensitive comparisons.

Methodology

Data source: World Bank World Development Indicators, indicator code PX.REX.REER, reference year 2024. The metric is defined as follows: 'Real effective exchange rate is the nominal effective exchange rate (a measure of the value of a currency against a weighted average of several foreign currencies) divided by a price deflator or index of costs. This indicator is an index series where 2010=100.' Higher values indicate greater real effective appreciation since 2010. Coverage: 95 countries meet the inclusion threshold (minimum threshold: 80). Data recency: 94 of 95 countries (98.9%) have data from within the last seven years. Data quality: 100% of datapoints are classified as official. Six extreme outliers were identified using a 3-standard-deviation threshold. Average year-over-year change across the dataset is 4.9%, well below the 50% volatility threshold. Values range from 55.02 (Japan) to 741.70 (Venezuela), a spread of 1,248%. Rankings reflect each country's REER relative to its own 2010 baseline and should not be interpreted as absolute measures of currency strength or competitiveness.

Sources

• World Bank