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i am often inquired as to what the meaning of nominal effective exchange rate is. Nominal effective exchange rate means the unadjusted weighted average value of a country's currency relative to all major currencies being traded within an index or pool of currencies. The weights are determined by the importance a home country places on all other currencies traded within the pool, as measured by the balance of trade. The NEER represents the relative value of a home country's currency compared to the other major currencies being traded (U.S. Dollar, Japanese yen, euro, etc.). A higher neer coefficient (above 1) means that the home country's currency will usually be worth more than an imported currency, and a lower coefficient (below 1) means that the home currency will usually be worth less than the imported currency. The NEER also represents the approximate relative price a consumer will pay for an imported good.