A data story
Is the rupee's stability real?
The interbank rate has looked calm for months. A different, less-watched number says something else entirely.
Stage 1 of 4
What everyone sees
The headline rate has been calm through mid-2026 — no dramatic swings, official messaging frames it as stable and market-driven.
Stage 2 of 4
The number underneath
The Real Effective Exchange Rate — which adjusts the interbank rate for inflation and trade-partner currencies — hit its highest level in roughly 7.5 years in June 2026, up 8.6% from a year earlier and well above its 10-year average of ~102.5.
Stage 3 of 4
Who feels it first
Pakistan's textile industry — its largest export sector — argues the rupee should be allowed to gradually weaken toward its real value. Despite a record remittance year, Pakistan still posted a current-account deficit in FY2026, a sign the export competitiveness drag shows up in the numbers that matter.
Stage 4 of 4
How overvalued, exactly?
Independent economists have argued for years that Pakistan's exchange rate policy should target competitiveness, not just stability. But we could not find a dated, current 2025-26 estimate quantifying exactly how overvalued the rupee is — only the historical fact that the IMF once called it 20% overvalued, back in 2017. The honest answer today is: probably somewhat, by an amount nobody has recently pinned down.
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