Pakistan’s Real Effective Exchange Rate (REER) rose to a seven-year high of 105.80 in April 2026, compared to 104.29 in March 2026, according to market data released by the State Bank of Pakistan figures and Topline Research.
REER is a measure of the rupee’s strength against the currencies of Pakistan’s major trading partners after adjusting for inflation differences.
A REER above 100 indicates a loss in trade competitiveness with exports becoming more expensive and imports getting cheaper, while a REER below 100 means the country’s exports are competitive.
When the REER moves above 100, it generally suggests that the rupee is becoming relatively overvalued compared to peer countries.
The latest reading suggests the rupee’s inflation-adjusted value is now nearly 6 percent stronger than the base benchmark.
The data shows Pakistan’s Real Effective Exchange Rate steadily climbing over the past two years after touching lows near 86 in early 2023. In April 2026, the REER reached 105.8, its highest level since 2018 and above the 10 year average of 102.68.
A rising REER can have mixed economic effects. While it may help reduce imported inflation, it can also weaken export competitiveness and widen external account pressures.
We have said this before: Rising REER can be a double-edged sword. It can help contain imported inflation, especially for commodities like oil, machinery, and food inputs but it can also hurt Pakistan’s export competitiveness and current account sustainability if the gap remains elevated for too long.
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