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Hey, can anyone please tell me the difference between NEER and REER?
Thanks
Bhai what did you not get about these? Difference between two?
See, exchange rate is useful as when you want to compare Indian currency's exchange rate with dollar then its cool. But if you want to see how is rupee doing wrt to other countries too ( as India also do trading with other countries using medium like Euro and YEn etc.) So you need some index which will capture this relative movement wrt all relevant country.. NEER is just that. But weight of exchange rate has to be related with its trading proportion. Like give more weight to USdollar then UAEDirham or Japanese Yen... and make an index.
REER is kind of improved version of this.. as it also takes into account Purchasing Power Parity too, so give more logical index.
Why was central CAMPA created? Why not money which states had got in their afforestation fund was simply left to them to utilize as the purpose is also specific (afforestation and related projects)?
Bhai kya batayein....was writing mains in previous attempts...this is first time was not able to clear even pre.... waise last time geo main mere... 180's me the....
Hey, can anyone please tell me the difference between NEER and REER?
Thanks
Copied from Quora. Seems to be good answer.
Nominal Effective Exchange Rate is the weighted average of bilateral nominal exchange rates of the home currency in terms of foreign currencies. It is the exchange rate of one currency against a basket of currencies, weighted according to trade with each country (not adjusted for inflation).
Real Effective Exchange Rate (REER) is the weighted average of nominal exchange rates, adjusted for inflation.
REER is calculated on the basis of NEER.
REER captures inflation differentials between India and its major trading partners and reflects the degree of external competitiveness of Indian products. It captures movements in cross-currency exchange rates.
Hey, can anyone please tell me the difference between NEER and REER?
Thanks
Copied from Quora. Seems to be good answer.
Nominal Effective Exchange Rate is the weighted average of bilateral nominal exchange rates of the home currency in terms of foreign currencies. It is the exchange rate of one currency against a basket of currencies, weighted according to trade with each country (not adjusted for inflation).
Real Effective Exchange Rate (REER) is the weighted average of nominal exchange rates, adjusted for inflation.
REER is calculated on the basis of NEER.
REER captures inflation differentials between India and its major trading partners and reflects the degree of external competitiveness of Indian products. It captures movements in cross-currency exchange rates.
Though saying REER is inflation adjusted is wrong! its Purchasing-Power parity adjusted. Both are very different.. So be clear on this front. You may lose marks in MCQs.
Hey, can anyone please tell me the difference between NEER and REER?
Thanks
Bhai what did you not get about these? Difference between two?
See, exchange rate is useful as when you want to compare Indian currency's exchange rate with dollar then its cool. But if you want to see how is rupee doing wrt to other countries too ( as India also do trading with other countries using medium like Euro and YEn etc.) So you need some index which will capture this relative movement wrt all relevant country.. NEER is just that. But weight of exchange rate has to be related with its trading proportion. Like give more weight to USdollar then UAEDirham or Japanese Yen... and make an index.
REER is kind of improved version of this.. as it also takes into account Purchasing Power Parity too, so give more logical index.
Thanks for your answers sir. Too take less space and tag minimum, won't repeat thanks every time. Hope you will help whenever you have time
@Toota Hua Dil CAMPA Bill created: - A National Authority - Authority for each of the states individually - Shifted CAMPA Fund to the public account of India - 10% funds to the National Authority, 90% will be credited to the states wherever the forests have been cleared
Why was there a need of this new law? Becasue Forest Conservation Act did not provide for a mechanism for the utilization of compensatory afforestation funds, Supreme Court or the NGT i am not sure laid down the directions to create a CAMPA Fund..still no mechanism was created and every year a budget allocation would have been required to use the fund To get rid of this, it was shifted to the Public Account so that it may be used as when necessary without approval from the legislatures
Hey, can anyone please tell me the difference between NEER and REER?
Thanks
Bhai what did you not get about these? Difference between two?
See, exchange rate is useful as when you want to compare Indian currency's exchange rate with dollar then its cool. But if you want to see how is rupee doing wrt to other countries too ( as India also do trading with other countries using medium like Euro and YEn etc.) So you need some index which will capture this relative movement wrt all relevant country.. NEER is just that. But weight of exchange rate has to be related with its trading proportion. Like give more weight to USdollar then UAEDirham or Japanese Yen... and make an index.
REER is kind of improved version of this.. as it also takes into account Purchasing Power Parity too, so give more logical index.
Thanks for your answers sir. Too take less space and tag minimum, won't repeat thanks every time. Hope you will help whenever you have time
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Comments
Difference between two?
See, exchange rate is useful as when you want to compare Indian currency's exchange rate with dollar then its cool. But if you want to see how is rupee doing wrt to other countries too ( as India also do trading with other countries using medium like Euro and YEn etc.)
So you need some index which will capture this relative movement wrt all relevant country.. NEER is just that. But weight of exchange rate has to be related with its trading proportion. Like give more weight to USdollar then UAEDirham or Japanese Yen... and make an index.
REER is kind of improved version of this.. as it also takes into account Purchasing Power Parity too, so give more logical index.
read that chapter and then ask if you still face any doubt.
Nominal Effective Exchange Rate is the weighted average of bilateral nominal exchange rates of the home currency in terms of foreign currencies. It is the exchange rate of one currency against a basket of currencies, weighted according to trade with each country (not adjusted for inflation).
Real Effective Exchange Rate (REER) is the weighted average of nominal exchange rates, adjusted for inflation.
REER is calculated on the basis of NEER.
REER captures inflation differentials between India and its major trading partners and reflects the degree of external competitiveness of Indian products. It captures movements in cross-currency exchange rates.
Both are very different.. So be clear on this front. You may lose marks in MCQs.
- A National Authority
- Authority for each of the states individually
- Shifted CAMPA Fund to the public account of India
- 10% funds to the National Authority, 90% will be credited to the states wherever the forests have been cleared
Why was there a need of this new law? Becasue Forest Conservation Act did not provide for a mechanism for the utilization of compensatory afforestation funds, Supreme Court or the NGT i am not sure laid down the directions to create a CAMPA Fund..still no mechanism was created and every year a budget allocation would have been required to use the fund
To get rid of this, it was shifted to the Public Account so that it may be used as when necessary without approval from the legislatures
And no need for thanks.. its voluntary