In August 2023, the Real Effective Exchange Rate Index (REER) of the Pakistani Rupee registered a month-on-month decrease of 1.61%, with a provisional value of 90.1151, down from the revised July 2023 value of 91.5865. Data released by the State Bank of Pakistan (SBP) indicates that the REER index has experienced a decline of 5.31% compared to August 2022.
Additionally, the Nominal Effective Exchange Rate Index (NEER) saw a month-on-month decrease of 2.85% in August, resulting in a provisional value of 36.72, down from the revised July value of 37.8. On an annual basis, the NEER Index recorded a significant decline of 23.26%.
The Pakistani Rupee (PKR) concluded August with a closing rate of 305.538 against the US Dollar (USD), marking a substantial depreciation of 6.19% compared to its value in July 2023. In comparison to August 2022, the PKR has depreciated by 28.65%.
It’s worth noting that an increase in the REER signifies that exports become more expensive while imports become cheaper, thereby indicating a decline in trade competitiveness. The price of each trading partner’s basket is weighted based on its share in imports, exports, or total foreign trade.
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