Real Effective Exchange Rate
Get the Real Effective Exchange Rate (REER) for a variety of countries over time from the Global Macro Database (GMDB). The REER is a trade-weighted average of a country’s currency relative to a basket of other major currencies, adjusted for relative price levels (inflation) between the country and its trading partners.
Unlike a simple bilateral exchange rate, the REER captures a currency’s overall competitiveness: a rising REER indicates that a country’s exports are becoming more expensive (and imports cheaper) relative to its trading partners after accounting for inflation differentials, while a falling REER indicates the opposite. The index is annual with 2015 = 100 for every country.
Data comes from the Global Macro Database (GMDB), further information about the variable can be found within https://www.globalmacrodata.com/documentation.html
Also known as: REER, trade-weighted exchange rate, currency competitiveness index.
Real Effective Exchange Rate in Python or via the MCP
Install the Finance Toolkit with:
pip install financetoolkit -U
Then call get_real_effective_exchange_rate as shown below.
from financetoolkit import Economics
economics = Economics(start_date='2018-01-01', end_date="2025-12-31")
economics.get_real_effective_exchange_rate(countries=['United States', 'Japan', 'Netherlands'])
Or, after setting up the Finance Toolkit MCP, ask:
How did the real effective exchange rates of the United States, Japan and the Netherlands develop from 2018 to 2025?
Which returns:
| United States | Japan | Netherlands | |
|---|---|---|---|
| 2018 | 103.02 | 107.295 | 104.015 |
| 2019 | 105.92 | 110.309 | 103.969 |
| 2020 | 107.337 | 111.285 | 106.116 |
| 2021 | 105.222 | 101.827 | 106.389 |
| 2022 | 115.234 | 87.8727 | 106.548 |
| 2023 | 116.036 | 83.6944 | 107.665 |
| 2024 | 118.848 | 79.2776 | 109.002 |
| 2025 | 119.249 | 80.8126 | 111.404 |
Parameters
get_real_effective_exchange_rate accepts the following parameters.
| Parameter | Type | Description | Example |
|---|---|---|---|
countries | list[str] | str | None | A list of countries or a single country to include in the results. Defaults to None. | ["United States", "Germany"] |
rolling | int | The rolling window size to use for smoothing the data (simple moving average). Defaults to None. | 4 |
trailing | int | The trailing window size to use for summing the data over trailing periods (e.g. a trailing-4-quarter sum). Defaults to None. | 4 |
growth | bool | Whether to return the growth data or the actual data. Defaults to False. | True |
lag | int | The number of periods to lag the growth data. Defaults to 1. | 4 |
standardize | bool | Whether to standardize (Z-Score) the result. When combined with growth=True, standardizes the growth values instead of the raw values. Defaults to False. | True |
rounding | int | None | The number of decimals to round the results to. Defaults to None. | 2 |
gmdb_forecasts | bool | Whether to include the years the Global Macro Database projects, from the IMF’s World Economic Outlook, up to five years ahead. Only applies to data from the Global Macro Database. Defaults to False, which ends a series with its last observation. | True |