Devaluation is a Devastating Act for a Third World Country : A Case Study of Pakistan Economy

The study was done to find out the relationship that Devaluation and impartial diverse Real Exchange Rate had. The problem was to evaluate the effect of devaluation on economic climate. The Research paper treated two hypotheses, that devaluation was considerably attached to real exchange rate. Since devaluation assessed as potential usage which was not usually assessed therefore the option the information was a limit but the issue was settled by implementing the method to determine potential usage. The information was according to three decades starting from 1979 until 2009, gathered from SBP's, Government Institution of Statistics' website. For the purpose of information selection the research paper was according to two aspects but mostly upon potential usage. Regression research and autocorrelation were done according to the dynamics of the hypotheses and the information. The results revealed that real exchange rate, was considerably and efficiently attached with the research of potential usage and the devaluation in one year may cause the devaluation for straight seven years in a country like Pakistan