- A Real Effective Exchange Rate below 100 means a country’s exports are competitive, while imports are expensive
Pakistan's Real Effective Exchange Rate (REER), a measure of the value of a currency against a weighted average of several foreign currencies, decreased significantly as it clocked in at 93.57 in May 2022, down from 95.87 in April this year, data released by the State Bank of Pakistan (SBP) showed.
A REER below 100 means the country’s exports are competitive, while imports are expensive.
As per the latest data, the REER decreased 2.4% on a monthly basis and has declined by 6.22% during the fiscal year to date. It's also down 9.11% from its peak in April 2021, when it stood at 102.95.
Facing a dip in remittances and export figures, Pakistan’s current account deficit widened by $15.2 billion during the first 11 months (July-May) of the outgoing fiscal year 2021-22, compared to a deficit of only $1.183 billion during the same period of the previous fiscal year (FY21), showed the latest SBP data released today.
Pakistan’s exports increased by 27.78% and remained $28.848 billion in the first eleven months of the current fiscal year (2021-22), compared to $22.576 billion during the same period of 2020-21, showed data released by the Pakistan Bureau of Statistics.
Meanwhile, imports increased by 44.28% during the first eleven months (July-May) of the current fiscal year and stood at $72.182 billion compared to $50.028 billion during the same period of the previous year.
Remittances from overseas workers during the first eleven months of the fiscal were recorded at $28.41, an increase of 6% as compared to same period last year.
As the country struggles to increase its foreign exchange reserves, the government has set its eyes on a successful revival of the $6-billion International Monetary Fund's (IMF) Extended Fund Facility.
Earlier on Tuesday, the government said Pakistan had received combined economic and financial targets for the seventh and eighth reviews of its IMF bailout programme. Prime Minister Shehbaz Sharif also said the IMF will club the seventh and eighth reviews of Pakistan's Extended Fund Facility (EFF), and disburse roughly $1.9 billion in the coming days.