Pakistan’s REER index rises to 7.5-year high in March 2026

Pakistan’s Real Effective Exchange Rate (REER), a measure of the value of a currency against a weighted average of several foreign currencies, clocked in at 105.17 in March 2026, up from 103.11 in February 2026, data released by the State Bank of Pakistan (SBP) on Thursday showed.

This takes the REER index to a 7.5-year high.

The REER last crossed the 105 mark in September 2018, when it stood at 106.63.

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 1.99% month-on-month (MoM) in March 2026.

When compared with March 2025, the REER value increased 3.5%, when it stood at 101.55.

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.

Topline Securities said the REER was higher than the last 10-year average of 102.77.

“We expect PKR/USD to close around Rs 280-282 by Jun 2026,” it said.

Meanwhile, the Nominal Effective Exchange Rate Index (NEER) increased by 1.02% MoM in March 2026 to a provisional value of 38.02 from 37.64 in February 2026.

On a yearly basis, the NEER index decreased by 1.3% from the value of 38.53 in March 2025.

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.