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

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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

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    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.
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