Enter the trade weights and current exchange rate indices (relative to the base period 100) for your major trading partners.
Error: Weights must sum to 100% and all indices must be greater than zero.
The calculated Nominal Effective Exchange Rate (NEER) is:
Understanding the Nominal Effective Exchange Rate (NEER)
The Nominal Effective Exchange Rate (NEER) is an unadjusted weighted average value of a country's currency relative to all major currencies within a basket of trading partners. Unlike bilateral exchange rates (like USD/EUR), the NEER provides a broader measure of a currency's international value and trade competitiveness.
The NEER Formula
The NEER is typically calculated using a geometric or arithmetic weighted average. The simplified arithmetic formula used in this calculator is:
w: The weight assigned to the specific currency (usually based on trade volume).
E: The exchange rate index of the currency (Current Rate / Base Rate × 100).
Why NEER Matters
An increase in the NEER index indicates an appreciation of the domestic currency against the basket. This makes imports cheaper but exports more expensive, potentially harming trade competitiveness. Conversely, a decrease in NEER indicates a depreciation, making exports more competitive on the global market.
Example Calculation
Suppose Country A trades with three partners with the following data:
A NEER of 103.90 suggests that the currency has appreciated by 3.9% relative to its base period against this specific basket.
function calculateNEER() {
var w1 = parseFloat(document.getElementById("weight1").value) || 0;
var i1 = parseFloat(document.getElementById("index1").value) || 0;
var w2 = parseFloat(document.getElementById("weight2").value) || 0;
var i2 = parseFloat(document.getElementById("index2").value) || 0;
var w3 = parseFloat(document.getElementById("weight3").value) || 0;
var i3 = parseFloat(document.getElementById("index3").value) || 0;
var errorDiv = document.getElementById("neer-error");
var resultBox = document.getElementById("neer-result-box");
var resultDisplay = document.getElementById("neer-result");
var interpretation = document.getElementById("neer-interpretation");
var totalWeight = w1 + w2 + w3;
// Validation
if (Math.abs(totalWeight – 100) > 0.01) {
errorDiv.style.display = "block";
errorDiv.innerHTML = "Error: Weights must sum to exactly 100%. Current sum: " + totalWeight.toFixed(2) + "%";
resultBox.style.display = "none";
return;
}
if (i1 <= 0 || i2 <= 0 || i3 100) {
var diff = neerValue – 100;
interpretation.innerHTML = "Analysis: The currency has appreciated by " + diff.toFixed(2) + "% compared to the base period.";
} else if (neerValue < 100) {
var diff = 100 – neerValue;
interpretation.innerHTML = "Analysis: The currency has depreciated by " + diff.toFixed(2) + "% compared to the base period.";
} else {
interpretation.innerHTML = "Analysis: The currency value is unchanged relative to the base period.";
}
}