February 01, 2019 (MLN): Pak Rupee’s Real Effective Exchange Rate index (REER) decreased by 3.82 percent in December, falling to a value of 102.2784 from 106.3427 in November.
According to data published by the State Bank of Pakistan, on an yearly basis, the REER index has declined by 14.19 percent compared to December 2017.
Similarly the Nominal Effective Exchange rate Index (NEER) fell by 3.61 percent in December to 70.7848 from 73.4378 in November. On a yearly basis, the NEER Index has fallen by 18.59 percent.
The State Bank had devalued the Rupee on November 30, 2018 by 3.78 percent.
Since the round of ‘Market Driven adjustments’ began in Dec 2017, PKR has lost 31.80 percent of its value.
PKR Closed out 2018 at 138.8619 against the Dollar compared to 110.4172 in 2017, a depreciation of 25.76 percent.
Reer is a measure of the value of a currency against a weighted average of several foreign currencies, a decrease in REER implies that exports become cheaper and imports become more expensive; therefore, a decrease indicates a gain in trade competitiveness.
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