Real effective exchange rate-indicator of Serbia's competitiveness

Abstract

Current business conditions imply intensive relations and interdependence between national economies at the global level. In such economic environment, it is natural to give high importance to international economic relations, and to put forward the indicators of the country's international competitiveness. The two significant indicators of a country's international competitiveness are nominal effective exchange rate and real effective exchange rate. The paper analyses real effective exchange rate trends and foreign exchange operations between Serbia and the countries that comprise a basket of currencies that are used for real effective exchange rate calculation. The research outcomes indicate that the real effective exchange rate of dinar is not an adequate or precise indicator of Serbia's competitiveness.

Keywords

• competitiveness
• nominal effective exchange rate
• real effective exchange rate
• import
• export