February 25, 2022 (MLN): The Real Effective Exchange Rate (REER) of Pakistan remained broadly unchanged at 97.03 in January 2022, observing no change from December 2021, the latest monthly data published by the State Bank of Pakistan (SBP) showed today.
The index increased 0.6% in January 2022 against the value of 96.46 in January 2021.
Cumulatively, REER has declined by 2.75% since June 2021 and 5.76% 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.
Meanwhile, the Nominal Effective Exchange rate Index (NEER) increased by 0.44% in January 2022 to a provisional value of 54.76 from the revised value of 54.52 in December 2021. On a yearly basis, the NEER index witnessed a drop of 12.77% from the value of 62.78 in January 2021.
