Pakistan’s Real Effective Exchange Rate (REER) eased to 103.3 in January 2026, down slightly from 103.6 recorded in December 2025, according to the latest data released by the central bank.
The REER is an index that measures the value of a country’s currency against a basket of currencies of its major trading partners, adjusted for inflation differences. A reading above 100 indicates that the currency is relatively overvalued compared to its trading partners, while a reading below 100 suggests improved export competitiveness.
Although the index declined marginally in January, Pakistan’s REER remains above the benchmark level of 100. This suggests that the rupee continues to face mild overvaluation pressure against key trading partner currencies.
Meanwhile, the Pakistani rupee has shown signs of modest strengthening against the US dollar. It closed at 279.6 per dollar, reflecting relative stability in the foreign exchange market.
