Pakistan's foreign exchange market efficiency: an empirical estimation

The primary objective of this analysis is to empirically test Pakistan's foreign exchange market efficiency. This study primarily concern with the association between forward and spot exchange rate in Pakistan. To estimate the data the “Ordinary Least Squares Method” (OLS) was used. The results showed that the FSER (future spot exchange rate) correctly predict by the FER (forward exchange rate). The conclusion of this result is that foreign exchange market of Pakistan is efficient for the considered time period. Secondly above results also reveal that there is no major difference in the result of those countries which has more trade with Pakistan like USA and that of those which has less trade with Pakistan like Canada.