Pakistan’s Real Effective Exchange Rate Falls Marginally in November 2023

Pakistan’s Real Effective Exchange Rate (REER) declined by 0.3 percentage points to 98.2 in November 2023. According to the latest monthly data released by the State Bank of Pakistan (SBP), the trend indicates a marginal decrease from 98.5 recorded in October 2023. A REER above 100 indicates a loss in trade competitiveness with exports becoming more expensive and imports getting cheaper, while a REER below 100 means the country’s exports are competitive. Pakistan’s current REER value of 98.2 suggests that exports offer good returns. REER also shows that the Pakistani Rupee is still greatly undervalued. This suggests that while exports are more competitive at the current level of REER, the returns would still be marginal unless the currency market shows recovery in later reviews.

Source: Pro Pakistani