Turkey’s revised consumer price index (CPI)-based Real Effective Exchange Rate (REER) index declined from 76.15 in December to 75.61 in January, central bank data showed on February 5.
The national lender added in a short note on its website that it has joined Turkey’s statistical agency (TUIK) in revising its data series. “The country weights used in the [REER] calculation have been updated with the figures for 2015-2017. Moreover, the starting year of the index, which was 2003, became 1994,” the central bank said.
It is notable that all the revisions employed by Turkey’s official data providers result in better figures on the country’s economic situation.
According to the old series, the REER hit a record low of 61.72 (revised) in September. The new series, however, puts the new record low at 62.50.
The Turkish lira’s (TRY’s) weakest ever level against the dollar, namely TRY7.24, was recorded on August 23 as factors including Turkey’s economic imbalances combined with a deterioration in relations with the Trump administration.
The old index stood at 85.29 (revised) at the end of 2017 while the new one shows 86.37 at end-2017 and 76.15 at end-2018.
A higher REER points to the lira gaining value in real terms against foreign currencies while a decline in the index indicates it has lost real value.
The TRY was trading at 5.2035 against the USD, stronger by 0.24% d/d, as of 18:10 Istanbul time on February 5.