Pakistan's real effective exchange rate rises to eight-year high of 108.9 in September

Profit reported that the State Bank of Pakistan released data on Friday showing the real effective exchange rate index rose to 108.9 in September 2026 from 107.9 in August. The reading holds at an eight-year peak and sits well above the 10-year average of 102.26. Such a level indicates that the rupee has strengthened in inflation-adjusted terms against the currencies of Pakistan's main trading partners.

The REER compares a currency's worth with a weighted group of foreign currencies once inflation gaps are stripped out. Analysts typically treat readings above 100 as signalling relative overvaluation, though the index alone cannot confirm whether the rupee is actually overvalued.

In the interbank market the rupee barely moved, ending at Rs276.91 per dollar, a marginal drop from Rs276.92 in the prior trading day. A Topline Securities survey found that most respondents foresee steady conditions for the currency until June 2027, with 44% forecasting a band of Rs280 to Rs285 and 41% a range of Rs275 to Rs280. Topline's analysts also expect the rupee to close in a Rs280 to Rs285 band against the dollar by June 2027.