Pakistan’s latest exchange-rate and REER data show no justification for another rupee devaluation, ex-minister Dr. Gohar Ejaz wrote on X.
He said Pakistan’s Real Effective Exchange Rate (REER) has risen above 100 without weakening export performance, which means PKR is “overvalued”.
From FY22 to FY24, Pakistan saw a massive 59.3 percent devaluation from Rs. 177 to Rs. 282 per dollar, one of the steepest in the region. Yet exports fell 9.2 percent in FY23, even though Pakistan’s REER dropped to 92.2. The data shows the rupee’s collapse did not translate into export gains.
As REER gradually increased again from 98.5 in FY24 to 100.9 in FY25, exports rebounded sharply, growing 8.6 percent and 5.6 percent, reaching $40.51 billion. Analysts say this completely contradicts the argument that devaluation boosts exports.
Data said Pakistan’s export weakness stems from structural problems, not currency valuation. High electricity tariffs of 12–14 cents/kWh, interest rates averaging 11 percent, and a heavily import-dependent industrial structure wipe out any theoretical gain from depreciation. During FY23’s devaluation spell, electricity costs spiked to 15 cents/kWh, neutralising competitiveness benefits.
International comparisons reinforce this point. Turkey’s REER recently dropped to 66, yet the lira continued falling because markets respond to credibility, not REER metrics. China maintains a REER of 135 while operating the world’s largest export machinery. Egypt’s deep devaluation, meanwhile, produced contraction rather than export growth.
Pakistan’s REER for FY26 stands at 104 as of October 31, only slightly above the benchmark. With the exchange rate stable at 278–282, backed by rising reserves and record remittances, experts warn that further devaluation would ignite inflation, encourage panic imports, and deliver zero competitiveness gains.
Gohar Ejaz argued that Pakistan needs stability, not depreciation. “The average REER for FY25 stands at 100, indicating there is no need for further devaluation,” he wrote. “Devaluation disproportionately harms 92 percent of our economy, while nearly half of our population lives below the poverty line. Those advocating devaluation represent vested interest groups seeking marginal, short-term gains at the expense of the people.”
This is completely right. At least, someone spoke up. The FY 22 to 24 devaluation was a disaster. This has never worked.
Absolutely correct, Pakistan does not need any further devaluation rather an appreciation in currency up to the level of Rs250 to the dollar and further increase in state bank reserves helps Pakistan out of recession.
Develuation + expensive energy costs + higher interest rates + no accountability of public service all these factors were an organized crime against nation which put millions of people under line of poverty, millions without jobs and standard of living drip drastically.
Develuation only important and helpful when your production has reached its peak in local market and extra in exports.
Now you want to get more business bcz your products quality is good and is accepted in local and international market.
To gain more market and to produce more to get more income you lower your curuncy value which gives your extra favour in international market that your product becomes cheaper in Price not in quality bcz of difference in exchange rate.
In our case situation is entirely different industry is not able to meet local demands so lowering cruncy rates makes industrial production in disaster bcz of above mentioned factors.
wiseness is make low energy costs, lowest interest rates and strong will to feed local consumer first and to use and explore local resources through local manpower and investments and having clean and honest and sincere public service you can win both local and international market.
Alhamdolilah