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NEER Vs REER Explained: Understanding How Currencies Are Compared to a Basket of Trading Partners

Relevance: GS Paper 3, Indian Economy   Q. With reference to the Indian economy, consider the following statements:1. An increase in Nominal Effective Exchange Rate (NEER) indicates the appreciation of rupee.2. An increase in the Real Effective Exchange Rate (REER) indicates an improvement in trade competitiveness.3. An increasing trend in domestic inflation relative to inflation in […]