Pakistan’s Real Effective Exchange Rate (REER) stood at 100.10 in August 2025, marking a slight increase from 100.01 in July, according to figures released by the State Bank of Pakistan (SBP) on Thursday.
The index recorded a 0.09% month-on-month rise. However, on a yearly basis, the REER slipped 0.06% compared with August 2024, when it stood at 100.16. In June 2025, the measure had fallen to its lowest level in 21 months.
A REER value above 100 indicates reduced competitiveness for exports and cheaper imports, while a reading below 100 suggests the opposite. The SBP clarified that the 100 mark should not be mistaken for 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 noted in an explanatory statement.
Meanwhile, the Nominal Effective Exchange Rate (NEER) index increased 0.90% month-on-month in August 2025 to a provisional value of 37.84, up from 37.51 in July. On a year-on-year basis, the NEER dropped 0.81% from 38.15 in August 2024.
According to the SBP, REER is calculated as an index of the price of a basket of goods in Pakistan relative to the price of the same basket in major trading partner countries. Each basket price is converted into the same currency using the nominal exchange rate, with weights assigned based on each partner’s share in Pakistan’s imports, exports, or overall trade.
