REAL EFFECTIVE EXCHANGE RATE FALLS IN DECEMBER

ISTANBUL, January 6 () - Turkey's consumer prices index (CPI) based real effective exchange rate fell in December, after rising to 1.5-year high level in November.

The real effective exchange rate fell to 112.80 level in December, from 114.11 level in November, which is revised from 113.99, according to the data released by the Central Bank of Turkey on Tuesday.

CPI based real effective exchange rate fell to 101.50 in January 2014, the lowest level since June 2006, when dollar hit its highest level ever at 2.39 lira, which forced the Central Bank for extraordinary Monetary Policy Committee meeting, when it raised the policy rate by 110 percent to 10.0 percent.

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.