KARACHI: Pakistan’s Real Effective Exchange Rate (REER) increased further in October 2025, reaching 103.95, up from 101.70 (revised) in September 2025, according to data released by the State Bank of Pakistan (SBP) on Monday. The rise reflects a 2.21% month-on-month (MoM) increase.
The REER measures a currency’s value relative to a weighted average of foreign currencies and indicates competitiveness in international trade. A REER value above 100 suggests that Pakistan’s exports are becoming less competitive, while imports are cheaper. Conversely, a REER below 100 signals greater export competitiveness.
The latest REER value also represents a 3.14% year-on-year increase from 100.78 in September 2024. The current level is higher than the 10-year average of 103.3, as noted by Topline Securities.
SBP clarified that a REER of 100 should not be seen as the equilibrium value of the currency. “Movement of the REER away from 100 simply reflects changes relative to its average value in 2010 and is unrelated to its equilibrium value,” the central bank explained in a note.
Meanwhile, the Nominal Effective Exchange Rate (NEER) increased by 0.61% MoM in October 2025, reaching 38.00 from 37.77 in September 2025. On a year-on-year basis, the NEER dropped slightly by 0.07% from the October 2024 value of 38.27.
According to SBP, the REER is an index of the price of a basket of goods in Pakistan relative to the same basket’s price in major trading partners. The price of each trading partner’s basket is weighted by its share in Pakistan’s total foreign trade, which includes imports and exports.
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