The reduced-form equilibrium real exchange rate (ERER) approach estimates directly an equilibrium real exchange rate for each country as a function of medium-term fundamentals such as the net foreign asset (NFA) position of the country, relative productivity differential  BIS central bankers’ speeches  5  between the tradable and non-tradable sectors, and the terms of trade.
Inflation declined sharply in January 2018, as a result of both an arithmetic effect deriving from the increase in energy prices in the same month of the previous year, and the lower rate of growth of core prices.