IDEAS home Printed from https://ideas.repec.org/p/pid/wpaper/20253.html

A Systematic Review of Exchange Rate Studies in the Context of Pakistan

Author

Listed:
  • Hafsa Hina

    (Pakistan Institute of Development Economics)

Abstract

The exchange rate is a crucial indicator of a nations performance in the external sector and influences key macroeconomic variables. In theory, exchange rates should be determined by market forces and reflect economic fundamentals; however, developing economies such as Pakistan often experience significant deviations due to structural weaknesses and policy interventions. This paper reviews the literature on the exchange rate in Pakistan, classifying and summarising the findings on nominal exchange rates, real exchange rates, real effective exchange rates, and foreign exchange market pressures. This review provides a comprehensive understanding of exchange rate policy in Pakistan and its economic implications. The paper concludes by identifying gaps in current research and suggesting areas of future study to address the complexities of exchange rate management in developing economies.

Suggested Citation

  • Hafsa Hina, 2025. "A Systematic Review of Exchange Rate Studies in the Context of Pakistan," PIDE-Working Papers 2025:3, Pakistan Institute of Development Economics.
    • Handle: RePEc:pid:wpaper:2025:3
    as

    Download full text from publisher

    File URL: https://file.pide.org.pk/pdfpideresearch/wp-25-03-a-systematic-review-of-exchange-rate-studies-in-the-context-of-pakistan.pdf
    File Function: First Version, 2025
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Muhammad Shahbaz & Aviral Kumar Tiwari & Mohammad Iqbal Tahir, 2015. "Analyzing time-frequency relationship between oil price and exchange rate in Pakistan through wavelets," Journal of Applied Statistics, Taylor & Francis Journals, vol. 42(4), pages 690-704, April.
    2. Rehana Siddiqui & Usman Afridi & Zafar Mahmood, 1996. "Exchange Rate Determination in Pakistan: A Simultaneous Equation Model," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 35(4), pages 683-692.
    3. Muhammad Zakaria & Eatzaz Ahmad, 2009. "Productivity Shocks and Nominal Exchange Rate Variability: a Case Study of Pakistan," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 24, pages 175-189.
    4. Kashif Munir & Nimra Riaz, 2021. "Remittances-Exchange Rate Nexus: Evidence from Pakistan," Audit and Accounting Review, University of Management and Technology, Lahore, Pakistan, vol. 1(1), pages 12-29.
    5. Walsh, Carl E, 1995. "Optimal Contracts for Central Bankers," American Economic Review, American Economic Association, vol. 85(1), pages 150-167, March.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Cukierman, Alex & Spiegel, Yossi & Leiderman, Leonardo, 2004. "The choice of exchange rate bands: balancing credibility and flexibility," Journal of International Economics, Elsevier, vol. 62(2), pages 379-408, March.
    2. Francesca Castellani & Xavier Debrun, 2005. "Designing Macroeconomic Frameworks: A Positive Analysis of Monetary and Fiscal Delegation," International Finance, Wiley Blackwell, vol. 8(1), pages 87-117, March.
    3. Svensson, Lars E. O., 1997. "Inflation forecast targeting: Implementing and monitoring inflation targets," European Economic Review, Elsevier, vol. 41(6), pages 1111-1146, June.
    4. Philip R. Lane, 1999. "What Determines the Nominal Exchange Rate? Some Cross Sectional Evidence," Canadian Journal of Economics, Canadian Economics Association, vol. 32(1), pages 118-138, February.
    5. Adam, Klaus & Billi, Roberto M., 2014. "Distortionary fiscal policy and monetary policy goals," Economics Letters, Elsevier, vol. 122(1), pages 1-6.
    6. Peters, Theo, 1997. "Stability in EMU," MPRA Paper 91713, University Library of Munich, Germany.
    7. Ms. Francesca Castellani & Mr. Xavier Debrun, 2001. "Central Bank Independence and the Design of Fiscal Institutions," IMF Working Papers 2001/205, International Monetary Fund.
    8. Josh Ryan-Collins, 2015. "Is Monetary Financing Inflationary? A Case Study of the Canadian Economy, 1935-75," Economics Working Paper Archive wp_848, Levy Economics Institute.
    9. Martin, Fernando M., 2015. "Debt, inflation and central bank independence," European Economic Review, Elsevier, vol. 79(C), pages 129-150.
    10. Ewald, Christian-Oliver & Geißler, Johannes, 2017. "Optimal contracts for central bankers: Calls on inflation," Applied Mathematics and Computation, Elsevier, vol. 292(C), pages 57-62.
    11. Joseph E. Gagnon, 2008. "Inflation regimes and inflation expectations," Review, Federal Reserve Bank of St. Louis, vol. 90(May), pages 229-243.
    12. Chandrarin, Grahita & Sohag, Kazi & Cahyaningsih, Diyah Sukanti & Yuniawan, Dani & Herdhayinta, Heyvon, 2022. "The response of exchange rate to coal price, palm oil price, and inflation in Indonesia: Tail dependence analysis," Resources Policy, Elsevier, vol. 77(C).
    13. Arman Mansoorian & Mohammed Mohsin, 2004. "Monetary policy in a cash‐in‐advance economy: employment, capital accumulation, and the term structure of interest rates," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 37(2), pages 336-352, May.
    14. Crowe, Christopher & Meade, Ellen E., 2008. "Central bank independence and transparency: Evolution and effectiveness," European Journal of Political Economy, Elsevier, vol. 24(4), pages 763-777, December.
    15. Daniel Laskar, 1997. ""Incohérence temporelle" de la politique monétaire optimale. Un argument en faveur des zones cibles," Revue Économique, Programme National Persée, vol. 48(1), pages 5-22.
    16. L. Lambertini & R. Rovelli, 2003. "Monetary and fiscal policy coordination and macroeconomic stabilization. A theoretical analysis," Working Papers 464, Dipartimento Scienze Economiche, Universita' di Bologna.
    17. Yessy Andriani & Prof. Prasanna Gai, 2013. "The Effect of Central Bank Independence on Price Stability: The Case of Indonesia," Bulletin of Monetary Economics and Banking, Bank Indonesia, vol. 15(4), pages 353-376, April.
    18. Roudari, Soheil, 2023. "Risk spillovers between S&P500, green bond, real estate, oil markets and dollar index," MPRA Paper 126830, University Library of Munich, Germany.
    19. Özmen, M. Utku & Yılmaz, Erdal, 2017. "Co-movement of exchange rates with interest rate differential, risk premium and FED policy in “fragile economies”," Emerging Markets Review, Elsevier, vol. 33(C), pages 173-188.
    20. Taisuke Nakata & Sebastian Schmidt & Paul Yoo, 2018. "Speed Limit Policy and Liquidity Traps," IMES Discussion Paper Series 18-E-06, Institute for Monetary and Economic Studies, Bank of Japan.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pid:wpaper:2025:3. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Khurram Iqbal (email available below). General contact details of provider: https://edirc.repec.org/data/pideipk.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.