Currency devaluation may not improve trade balance in Pakistan.
The study looked at how changes in Pakistan's real exchange rate affect its trade balance from 1980 to 2006. By using a specific statistical method, the researchers found that there is a long-term relationship between the two factors. They also discovered that when the real exchange rate changes, the trade balance tends to worsen, rather than improve. This means that devaluing the currency may not help fix the country's trade balance issues.