Macroeconomic determinants of the real exchange rate in Pakistan

This research endeavors to comprehensively examine the macroeconomic determinants that influence real exchange rate in Pakistan over an extended temporal horizon. By employing quarterly data spanning from first quarter of 1980 fourth 2020, this study employs autoregressive distributed lag (ARDL) methodology discern both immediate and enduring rate. The findings distinctly reveal variables such as money supply, trade openness, workers' remittances, productivity collectively constitute long-term context Pakistan. Specifically, augmentation supply escalated level economic openness manifestly contribute reduction rate, whereas inflow remittances heightened exhibit propensity elevate duration. exploration underscores imperative for proactive engagement by nation's monetary authorities within foreign market, with overarching objective preserving currency's value at a state equilibrium and, thereby, ensuring holistic integrity economy.