Istanbul, April 6 () - Turkey's consumer prices index (CPI) based real effective exchange rate fell to 104.05 level in March, in the new calculation method, according to the Real Effective Exchange Rate Indices data released by the Central Bank released on Monday.
Nominal effective exchange rate is the weighted average value of the Turkish lira relative to the basket of the countries’ currencies that have a significant share in Turkey's foreign trade. Weights are determined using bilateral trade flows. As for real effective exchange rate, it is obtained by purifying relative price effects in nominal effective exchange rate.
Central Bank revised February data to 105.44 from 113.2 and January data to 108.25 from 117.12 levels, due to method change. Domestic producer prices index (D-PPI) fell to 103.26, from 104.99 in February and 106.74 in January, calculated by the new method.
"In contrast to the old indices using 2006-2008 period trade flows for the entire series, the new indices have been calculated based on three-year trade flow averages, in compliance with the methodologies of international organizations" the Central Bank said in its statement on the calculation method chnanges. "Indices obtained by using the country weights calculated for each period have been combined by the chain-linking method."
Central Bank said, the number of countries covered in the indices has been increased from 36 to 45 for CPI-based index and from 31 to 38 for PPI-based index.
The Unit Labor Cost-Based Real Effective Exchange Rate Index, which had not been updated since the first quarter of 2012 due to the limitations on available data from the Organisation for Economic Co-operation and Development (OECD), had been recalculated using unit labor data of 18 countries published by the European Statistical Office (Eurostat), it added.