Despite a slight widening in the rupee-dollar exchange rate between the markets to Rs2, it remains within the IMF-recommended level of 1.25%. Real Effective Exchange Rate (REER)In October, Pakistan’s Real Effective Exchange Rate (REER), which measures the local currency against the currency basket of trading partner countries, experienced a significant appreciation of 6.9 within just a month. The central bank has traditionally maintained REER around 95-96 during periods of satisfactory foreign exchange reserves. The positive stance from the IMF and the subsequent boost in foreign exchange reserves are contributing factors. However, experts advise cautious optimism, emphasising the need for continued economic reforms to ensure sustainable growth and stability in the foreign exchange market.

Source: The Express Tribune November 21, 2023 16:31 UTC