January 15, 2021 (MLN): The Real Effective Exchange Rate (REER) of Pakistan, increased to 98.5 in November 2021, a jump of 2% compared to 96.4 recorded in October 2021, the latest monthly data published by the State Bank of Pakistan (SBP) showed on Saturday.
The index decreased 1% in November 2021 against the value of 99.3 in November 2020.
Cumulatively, REER has declined by 1% since June 2021 and 4% from its recent peak in April 2021, implying that Pakistan's goods become more competitive in the international markets.
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.
On the other hand, the Nominal Effective Exchange rate Index (NEER) decreased by 0.2% in November 2021 to a provisional value of 55.35 from the revised value of 55.48 in October 2021. On a yearly basis, the NEER index witnessed a drop of 7% from the value of 59.8 in November 2020.
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