Karachi September 30 2022: The Real Effective Exchange Rate (REER) index was recorded at 94.3 in August 2022 as compared to 93.2 in July 2022, decreased by 1.1 percent owing to higher inflation in Pakistan compared to trading partners, according to data published by State Bank of Pakistan.
Country’s inflation, increased by 27.3 percent on year-on-year basis in August 2022 as compared to an increase of 24.9 in the previous month and 8.4 percent in August 2021.
While during the month of August 2022 Pak rupee appreciates 8.6 percent to close the month at 220, as per official data of SBP.
Note: A REER index of 100 should not be misinterpreted as denoting the equilibrium value of the currency. 100 merely represents the value of the currency at a chosen point in time (in this case the average value of the currency in 2010). Therefore, movement of the REER away from 100 simply reflects changes relative to its average value in 2010 and is unrelated to its equilibrium value.
