September 17, 2021 (MLN): Pak Rupee's Real Effective Exchange Rate Index (REER) decreased to a provisional value of 97.4 in August’21 compared to 99.4 in July’21.

According to data published by the State Bank of Pakistan (SBP), the REER is down by 2.1% on a monthly basis and 5.4% from its recent peak in April’21.

The index increased by 6.09% percent in August’21 against the value of 91.79 in August’20.

Similarly, the Nominal Effective Exchange rate Index (NEER) decreased by 2.58% in August’21 to a provisional value of 57.81 from the revised value of 59.34 in July’21. On a yearly basis, the NEER Index has increased marginally by 0.47%.

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 have become cheaper while imports become more expensive therefore, this decrease indicates an increase in trade competitiveness.

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