November 26, 2021 (MLN): Pakistan’s Real Effective Exchange Rate Index (REER) fell further to a provisional value of 95.6 in October 2021, a decline of 0.3% compared to 95.8 recorded in the previous month, the latest monthly data published by the State Bank of Pakistan (SBP) showed on Friday.
Cumulatively, REER has declined by 4.2% since June 2021 and 7.2% from its recent peak in April 2021, said the central bank in a tweet post, implying that Pakistan's goods become more competitive in the international markets.
Similarly, the index displayed a depreciation of 1.57% percent in October 2021 against the value of 97.10 in October 2020.
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.
Meanwhile, the Nominal Effective Exchange rate Index (NEER) decreased by 1.49% in October 2021 to a provisional value of 55.49 from the revised value of 56.32 in September 2021. On a yearly basis, the NEER index witnessed a drop of 6.06% from the value of 59.07 in October 2021.
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