Pakistan’s Real Effective Exchange Rate (REER) continued its upward trend in September 2025, reaching 101.73, up from a revised 100.09 in August, according to the latest data released by the State Bank of Pakistan (SBP) on Monday.
The increase represents a 1.64% month-on-month (MoM) rise, while on an annual basis, the REER index grew 3.13% compared to 98.64 in September 2024.
A REER value above 100 indicates that Pakistan’s exports are becoming less competitive internationally, while imports become cheaper. The reverse holds true when the index dips below 100.
Meanwhile, the Nominal Effective Exchange Rate (NEER), which tracks changes in the nominal value of the rupee against a basket of trading partner currencies, showed a slight decline of 0.18% MoM in September to a provisional value of 37.77, compared to 37.84 in August 2025. The same 0.18% decrease was observed on a year-on-year basis from 37.84 in September 2024.
The SBP clarified that a REER reading of 100 does not represent the equilibrium value of the rupee.
“Movement of the REER away from 100 simply reflects changes relative to its average value in 2010 and is unrelated to its equilibrium value,” the central bank explained in its note.
According to the SBP, the REER measures the price of a basket of goods in one country relative to the price of the same basket in its key trading partners, expressed in a common currency. Each trading partner’s basket is weighted based on its share in Pakistan’s imports, exports, or total trade.
