KARACHI: Pakistan’s real effective exchange rate (REER), the value of the rupee against a basket of trading partner currencies, hit a nine-month low in September.
Data from the State Bank of Pakistan showed on Monday that REER depreciated to 98.6 in September, its lowest level since December 2023.The REER was 100.1 in August.Samiullah Tariq, head of research at Pak-Kuwait Investment Company, said lower inflation has helped reduce REER and increase the competitiveness of the Pakistani rupee against other currencies.
Pakistan’s inflation has been on a downward trajectory since June 2023. The consumer price index inflation slowed to 6.9 per cent in September, the lowest since January 2021, mainly due to a high base effect.
The rupee continued to follow a range-bound trading pattern. The local unit closed at 277.68 per dollar in the interbank market, slightly down from 277.61 on Friday. Dealers said that the rupee barely lost ground because demand for dollars from corporates and importers typically increases on the first trading day of the week, which puts pressure on the rupee.In the open market, though, the rupee strengthened versus the dollar, closing at 278.75 from the previous session’s 279.08.
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