How does next.js determine the value of NEXT_PUBLIC_BASE_URL?

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I am not setting any environment variable for NEXT_PUBLIC_BASE_URL. However, on running the application locally and using a .env.local file, I see the process.env.NEXT_PUBLIC_BASE_URL is set to localhost:3000

I have tried looking for it in the next cli source code, but I am not able to find where it's being set

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