diff --git a/CHANGELOG.md b/CHANGELOG.md
index 6aae9e341..923a40a78 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -10,7 +10,7 @@
 
 ##### Bug Fixes
 
-- None.
+- Fix index/report exclude regression.
 
 ## 2.12.2 (2023-03-19)
 
diff --git a/Sources/Shared/Configuration.swift b/Sources/Shared/Configuration.swift
index ea3d97dd4..a2c8b3cc6 100644
--- a/Sources/Shared/Configuration.swift
+++ b/Sources/Shared/Configuration.swift
@@ -321,13 +321,9 @@ public final class Configuration {
     // MARK: - Private
 
     private func buildFilenameMatchers(with patterns: [String]) -> [FilenameMatcher] {
+        // TODO: respect filesystem case sensitivity.
         let pwd = FilePath.current.string
-
-        return patterns.map {
-            let pattern = $0.hasPrefix("/") ? $0 : "\(pwd)/\($0)"
-            // TODO: respect filesystem case sensitivity.
-            return FilenameMatcher(pattern: pattern, caseSensitive: false)
-        }
+        return patterns.map { FilenameMatcher(relativePattern: $0, to: pwd, caseSensitive: false) }
     }
 
     private func configurationPath(withUserProvided path: FilePath?) throws -> FilePath? {
diff --git a/Sources/Shared/Extensions/FilenameMatcher+Extension.swift b/Sources/Shared/Extensions/FilenameMatcher+Extension.swift
new file mode 100644
index 000000000..3e6467a48
--- /dev/null
+++ b/Sources/Shared/Extensions/FilenameMatcher+Extension.swift
@@ -0,0 +1,23 @@
+import Foundation
+import FilenameMatcher
+
+public extension FilenameMatcher {
+    init(relativePattern: String, to base: String, caseSensitive: Bool) {
+        let patternComponents = relativePattern.split(separator: "/", omittingEmptySubsequences: false)
+        let parentTraversalCount = patternComponents.firstIndex { $0 != ".." } ?? 0
+
+        if parentTraversalCount > base.split(separator: "/").count {
+            self.init(pattern: "")
+            return
+        }
+
+        let baseComponents = base.split(separator: "/", omittingEmptySubsequences: false)
+        let traversedPattern = patternComponents.dropFirst(parentTraversalCount).joined(separator: "/")
+        let traversedBaseParts = baseComponents.dropLast(parentTraversalCount)
+        let traversedBase = traversedBaseParts.joined(separator: "/")
+        let normalizedBase = traversedBase.hasSuffix("/") ? traversedBase : "\(traversedBase)/"
+        let shouldPrependPwd = !["/", "*"].contains { relativePattern.hasPrefix($0) }
+        let pattern = shouldPrependPwd ? "\(normalizedBase)\(traversedPattern)" : traversedPattern
+        self.init(pattern: pattern, caseSensitive: caseSensitive)
+    }
+}
diff --git a/Tests/PeripheryTests/Extensions/FilenameMatcherTests.swift b/Tests/PeripheryTests/Extensions/FilenameMatcherTests.swift
new file mode 100644
index 000000000..6e726d68a
--- /dev/null
+++ b/Tests/PeripheryTests/Extensions/FilenameMatcherTests.swift
@@ -0,0 +1,43 @@
+import Foundation
+import Shared
+import XCTest
+import FilenameMatcher
+
+final class FilenameMatcherTests: XCTestCase {
+    func testRelativePatterns() {
+        assertMatch(filename: "/Sources/File.swift", relativeTo: "/", pattern: "/Sources/File.swift")
+        assertMatch(filename: "/Sources/File.swift", relativeTo: "/", pattern: "Sources/File.swift")
+        assertMatch(filename: "/Sources/File.swift", relativeTo: "/", pattern: "*/Sources/File.swift")
+        assertMatch(filename: "/Sources/File.swift", relativeTo: "/", pattern: "**/Sources/File.swift")
+
+        assertMatch(filename: "/a/b/Sources/File.swift", relativeTo: "/", pattern: "*/Sources/File.swift")
+        assertMatch(filename: "/a/b/Sources/File.swift", relativeTo: "/", pattern: "**/Sources/File.swift")
+        assertMatch(filename: "/a/b/Sources/File.swift", relativeTo: "/", pattern: "a/**/File.swift")
+
+        assertMatch(filename: "/a/b/Sources/File.swift", relativeTo: "/a", pattern: "*/Sources/File.swift")
+        assertMatch(filename: "/a/b/Sources/File.swift", relativeTo: "/a", pattern: "**/Sources/File.swift")
+        assertMatch(filename: "/a/b/c/Sources/File.swift", relativeTo: "/b", pattern: "/**/File.swift")
+
+        assertMatch(filename: "/a/Sources/File.swift", relativeTo: "/a/b", pattern: "../Sources/File.swift")
+        assertMatch(filename: "/a/Sources/File.swift", relativeTo: "/a/b/c/d", pattern: "../../../Sources/*.swift")
+        assertMatch(filename: "/a/b/c/d/Sources/File.swift", relativeTo: "/a/b", pattern: "../*/Sources/File.swift")
+        assertMatch(filename: "/a/b/c/d/Sources/File.swift", relativeTo: "/a/b", pattern: "../**/File.swift")
+        assertMatch(filename: "/a/b/c/d/Sources/File.swift", relativeTo: "/a/b/c", pattern: "../../**/File.swift")
+
+        assertNotMatch(filename: "/Sources/File.swift", relativeTo: "/", pattern: "/x/**/Sources/File.swift")
+        assertNotMatch(filename: "/Sources/File.swift", relativeTo: "/", pattern: "../../**/File.swift")
+        assertNotMatch(filename: "/a/Sources/File.swift", relativeTo: "/", pattern: "/Sources/File.swift")
+    }
+
+    // MARK: - Private
+
+    private func assertMatch(filename: String, relativeTo base: String, pattern: String, file: StaticString = #file, line: UInt = #line) {
+        let matcher = FilenameMatcher(relativePattern: pattern, to: base, caseSensitive: false)
+        XCTAssertTrue(matcher.match(filename: filename), file: file, line: line)
+    }
+
+    private func assertNotMatch(filename: String, relativeTo base: String, pattern: String, file: StaticString = #file, line: UInt = #line) {
+        let matcher = FilenameMatcher(relativePattern: pattern, to: base, caseSensitive: false)
+        XCTAssertFalse(matcher.match(filename: filename), file: file, line: line)
+    }
+}