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Pakistan’s REER index hits equilibrium
Further gain in rupee, inflation may make exports uncompetitive
KARACHI:
Pakistan’s real effective exchange rate (REER) hits equilibrium. However, a further appreciation in rupee against a basket of major trading partners’ currencies and increase in domestic inflation reading would make the country’s exports uncompetitive.
The REER index increased 3.37% to 100.50 in March 2021 compared to 97.22 in February, Pakistan’s central bank reported on Thursday.
REER returned to over 100 reading on the index after over two years. A further increase in the rate would make Pakistan’s exports uncompetitive and would make imports cheaper. REER increased after the rupee-dollar exchange rate hit 22-month high at Rs152.75 to the US dollar on March 31 and inflation surged 9.1% in March.
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