Pakistan’s Real Effective Exchange Rate (REER) climbed to 108.93 in September 2026, reaching its highest level in eight years and moving further above its 10-year average of 102.26, according to Topline Research.

The index increased from 107.87 in August 2026, indicating a continued rise in the rupee’s value relative to the currencies of Pakistan’s trading partners after adjusting for differences in inflation.

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According to Topline Research, a REER reading above 100 can indicate that a currency is overvalued relative to the currencies of its trading partners. However, the index alone does not establish whether a currency is definitively overvalued.

The REER measures a currency’s value against a basket of trading partners’ currencies, adjusted for relative price levels. It is used to assess changes in a country’s international price competitiveness.

A rising REER can make a country’s goods relatively more expensive compared with those of its trading partners, potentially affecting export competitiveness and import demand.