Pakistan’s REER index appreciates further to 104.76 in November 2025

Pakistan’s Real Effective Exchange Rate (REER), a measure of the value of a currency against a weighted average of several foreign currencies, witnessed further increase as it clocked in at 104.76 in November 2025, up from 103.92 (revised) in October 2025, data released by the State Bank of Pakistan (SBP) on Wednesday showed.

A REER above 100 means the country’s exports are uncompetitive, while imports are cheaper. The situation reverses when REER stands below 100 on the index.

As per SBP’s latest data, the REER increased nearly 0.8% month-on-month (MoM) in November 2025.

When compared with November 2024, the REER value increased 1.7%, when it stood at 103.02.

“Pakistan’s REER has increased to 104.76 in Nov 2025, higher than the last 10-year average of 103.2,” said Topline Securities.

“A rising REER suggests that the relative value of the home currency is becoming overvalued compared to peer countries,” it added.

Meanwhile, the SBP says a REER index of 100 should not be misinterpreted as denoting 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 said in an explanatory note on the topic.

Meanwhile, the Nominal Effective Exchange Rate Index (NEER) increased by 0.49% MoM in November 2025 to a provisional value of 38.18 from 38.00 in October 2025.

On a yearly basis, the NEER index decreased by 1.8% from the value of 38.89 in November 2024.

What is REER?

As per the central bank, REER is an index of the price of a basket of goods in one country relative to the price of the same basket in that country’s major trading partners.

“The prices of these baskets are expressed in the same currency using the nominal exchange rate with each trading partner. The price of each trading partner’s basket is weighted by its share in imports, exports, or total foreign trade,” the SBP website says.