REER rises to 7-month high in November

KARACHI: Pakistan’s real effective exchange rate (REER) rose to the highest level in seven months in November, data from the State Bank of Pakistan showed on Tuesday.

The REER, which shows the competitiveness of the local currency against trading partners, appreciated by 2.12 per cent month-on-month to 102.92 in November, the highest since April 2024. So far this year, the REER has increased by 4.14 per cent.

According to analysts, the November REER index indicated that, concerning Pakistan’s trading partners, the rupee is trading at fair levels or just marginally above par. The rupee continued to fall against the dollar for the second consecutive session in the interbank market on Tuesday. The local unit closed at 278.27 per dollar, compared with the previous closing price of 278.17. Dealers said the rupee lost ground due to year-end dollar demand from importers. However, supplies remained low because of sluggish dollar sales from exporters.

The rupee also decreased slightly in the open market, falling from 279.14 on Monday to 279.23 against the dollar. Analysts do not see any significant pressure on the rupee this fiscal year due to the lack of risks to the external sector and optimism that the planned foreign currency inflows will materialise on time. They expect the rupee to remain stable, trading at 282 per dollar by the end of FY25.