Pakistan’s Real Effective Exchange Rate (REER), a measure of the value of a currency against a weighted average of several foreign currencies, witnessed a decline as it clocked in at 102.54 in February 2026, down from 103.30 in January 2026, data released by the State Bank of Pakistan (SBP) on Monday 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 decreased 0.74% month-on-month (MoM) in February 2026.
Also read: Pakistan’s REER index clocks in at 102.27 in February 2025
When compared with February 2025, the REER value increased 0.3%, when it stood at 102.25 (revised).
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) decreased by 0.50% MoM in February 2026 to a provisional value of 37.64 from 37.83 in January 2026.
On a yearly basis, the NEER index decreased by 3.7% from the value of 39.09 in February 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.
American Dollar Exchange Rate