Explanation: The Nominal Effective Exchange Rate (NEER) of the rupee is a weighted average of exchange rates before the currencies of India’s major trading partners.

• When the weight of inflation is adjusted with the NEER, we get the Real Effective Exchange Rate (REER) of the rupee.
• Since inflation has been on the higher side in recent months, the REER of the rupee has been more against it than the NEER.

Source: Ramesh Singh