However, the gains will be limited due to weak global demand and costly imports, according to economists and treasury executives.
A real effective exchange rate is the nominal effective exchange rate (a measure of the value of a currency against a weighted average of several foreign currencies) divided by a price deflator or index of costs.
The REER index for the rupee declined from 110.40 in February to 103.71 on April 27. When the REER touches 100, the currency reflects its real value.
Since the end of April, the rupee (its market value) has depreciated 6.2 per cent against the dollar and 13 per cent from its 2012 peak in February.
According to Reserve Bank of India data, the REER declined from 116.13 for June 2011 to 103.75 in December 2011. It was 108.78 for March and dipped to 103.71 as on April 27.
Economists and treasury executives said an undervalued
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