Impact of Currency Devaluation on Pakistan Economy

The objective of this research paper is to analyze the impact of currency devaluation on Pakistan's economy. For this purpose, the authors used 20-year data for the period of 1998-2018. The independent variables were currency devaluation, exports, imports, inflation rate, unemployment rate, investment and saving rate while economic growth was dependent variable. The statistical techniques such as descriptive statistics, ADF Test, Correlation Analysis and Multiple Regression were used to analyze data. The findings of study show that imports and investment have positive relationship with GDP growth while all other variables have negative association with it. It means that currency devaluation does not benefit to Pakistan's economy and increases its trade deficit. Thus, it is not a good policy option.