PKR’s Real Effective Exchange Rate Index increases by 2.93 precent in May

Jul 02, 2020 (MLN): Pak Rupee's Real Effective Exchange Rate Index (REER) increased by 2.93 percent in May 2020 to a provisional value of 97.21 from the revised value of 94.44 in April 2020.

According to data published by the State Bank of Pakistan (SBP), the REER index has increased by 0.22 percent compared to May 2019.

Similarly the Nominal Effective Exchange rate Index (NEER) increased by 2.22 percent in May to a provisional value of 62.52 from the revised value of 61.16 in April. On a yearly basis, the NEER Index has decreased by 6.55 percent.

PKR closed May at 163.1022 against the USD showing a depreciation of 1.79 percent compared to its value in April 2020. However, Compared to May 2019 PKR has depreciated by by 9.30 percent.

REER is a measure of the value of a currency against a weighted average of several foreign currencies, an increase in REER implies that exports become more expensive and imports become cheaper therefore, this increase indicates a decline in trade competitiveness.

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