Pakistan’s Real Effective Exchange Rate Increases Slightly in December 2023

Pakistan’s Real Effective Exchange Rate (REER) increased by 0.6 percentage points to 98.9 in December 2023. According to the latest monthly data released by the State Bank of Pakistan (SBP), the trend indicates a small increase from 98.3 recorded in November 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 98.9 suggests that exports offer good returns. REER also shows that the Pakistani Rupee is still undervalued.