Pakistan’s Real Effective Exchange Rate (REER) climbed to 107.9 in August 2026, indicating that the rupee remained relatively strong against the currencies of its major trading partners.

According to the latest State Bank of Pakistan data, the REER increased by 0.02 percent month-on-month in August. It has risen by around 4 percentage points from 103.11 in February.

A REER above 100 generally indicates that a country’s currency is relatively stronger against the currencies of its trading partners after adjusting for inflation.

A stronger rupee can make imported goods relatively cheaper for consumers and businesses in Pakistan. However, it can also make Pakistani products more expensive for buyers in international markets.

This can put pressure on the competitiveness of exporters, particularly when the REER remains elevated for an extended period.

However, exchange rates are only one factor affecting exports. Global demand, productivity, production costs and trade policies also play an important role in determining the performance of Pakistani exporters.