The following table shows a selection of exchange rate indices (effective exchange rates) for the years 2011 to 2020, based on 2011 = 100.\n\n\n\n\n \n\n\n201
The following table shows a selection of exchange rate indices (effective exchange rates) for the years 2011 to 2020, based on 2011 = 100.
\r\n| \r\n \r\n | \r\n\r\n 2011 \r\n | \r\n\r\n 2012 \r\n | \r\n\r\n 2013 \r\n | \r\n\r\n 2014 \r\n | \r\n\r\n 2015 \r\n | \r\n\r\n 2016 \r\n | \r\n\r\n 2017 \r\n | \r\n\r\n 2018 \r\n | \r\n\r\n 2019 \r\n | \r\n\r\n 2020 \r\n | \r\n
| \r\n Australian $ \r\n | \r\n\r\n 100.0 \r\n | \r\n\r\n 102.92 \r\n | \r\n\r\n 98.18 \r\n | \r\n\r\n 92.39 \r\n | \r\n\r\n 85.21 \r\n | \r\n\r\n 84.03 \r\n | \r\n\r\n 86.31 \r\n | \r\n\r\n 82.54 \r\n | \r\n\r\n 78.82 \r\n | \r\n\r\n 77.43 \r\n | \r\n
| \r\n US $ \r\n | \r\n\r\n 100.0 \r\n | \r\n\r\n 103.33 \r\n | \r\n\r\n 106.20 \r\n | \r\n\r\n 109.11 \r\n | \r\n\r\n 125.17 \r\n | \r\n\r\n 125.97 \r\n | \r\n\r\n 124.84 \r\n | \r\n\r\n 121.94 \r\n | \r\n\r\n 126.12 \r\n | \r\n\r\n 124.89 \r\n | \r\n
| \r\n Japanese yen \r\n | \r\n\r\n 100.0 \r\n | \r\n\r\n 102.54 \r\n | \r\n\r\n 83.08 \r\n | \r\n\r\n 76.60 \r\n | \r\n\r\n 72.43 \r\n | \r\n\r\n 81.74 \r\n | \r\n\r\n 78.12 \r\n | \r\n\r\n 77.94 \r\n | \r\n\r\n 81.31 \r\n | \r\n\r\n 82.30 \r\n | \r\n
| \r\n Sterling \r\n | \r\n\r\n 100.0 \r\n | \r\n\r\n 104.38 \r\n | \r\n\r\n 101.83 \r\n | \r\n\r\n 108.00 \r\n | \r\n\r\n 115.04 \r\n | \r\n\r\n 102.05 \r\n | \r\n\r\n 95.67 \r\n | \r\n\r\n 96.12 \r\n | \r\n\r\n 95.70 \r\n | \r\n\r\n 94.77 \r\n | \r\n
| \r\n Euro \r\n | \r\n\r\n 100.0 \r\n | \r\n\r\n 93.97 \r\n | \r\n\r\n 99.03 \r\n | \r\n\r\n 99.26 \r\n | \r\n\r\n 89.19 \r\n | \r\n\r\n 91.08 \r\n | \r\n\r\n 93.65 \r\n | \r\n\r\n 96.77 \r\n | \r\n\r\n 94.08 \r\n | \r\n\r\n 94.79 \r\n | \r\n
| \r\n S Korean won \r\n | \r\n\r\n 100.0 \r\n | \r\n\r\n 100.53 \r\n | \r\n\r\n 108.53 \r\n | \r\n\r\n 115.72 \r\n | \r\n\r\n 118.84 \r\n | \r\n\r\n 114.17 \r\n | \r\n\r\n 116.96 \r\n | \r\n\r\n 118.01 \r\n | \r\n\r\n 113.58 \r\n | \r\n\r\n 110.79 \r\n | \r\n
Source: Based on data from Monthly Effective Exchange Rate Indices (narrow) (Bank for International Settlements, April 2021)..
\r\n(a) Explain what is meant by an exchange rate index or an effective exchange rate.
\r\n(b) Calculate the annual rate of appreciation or depreciation for each currency for each year from 2011. It is suggested that you use an Excel spreadsheet.
\r\n(c) Calculate the percentage appreciation or depreciation of each currency when comparing 2020 with 2010.
