Currency devaluation boosts exports, improves trade balance in Pakistan.
The study looked at how the trade balance and exchange rate in Pakistan are related from 1961 to 2013. They found that there is a long-term connection between the two, meaning changes in the exchange rate can impact the trade balance. Specifically, when the currency is devalued, it can help improve the trade balance by increasing exports and decreasing imports. This suggests that the exchange rate plays a significant role in shaping Pakistan's trade balance over time.