This document provides an in-depth knowledge of the reasons of devaluation of currency in Pakistan and what are the major factors played role in currency devaluation in Pakistan. Additionally, this document serves as an academic project and can be used to present how currency devalues and and its impact on economy, impact of currency devaluation on the exports.

1. Reasons of Devaluation of Currency in Pakistan
Currency Devaluation
Author: www.magcify.com
Date: 01-Mar-2014
Abstract
The entire information inside this document is all in relation to define the reasons and causes of currency
devaluation in Pakistan. Within this document, all the detailed information inter-related to the currency
devaluation in addition to its causes, reasons, and effects are depicted. This document is supposed to really
help the readers who will be concerned and paying attention to see how the Pakistani currency is devalued
and what the major influencers are.
The intact process is divided into sections and categories to conduct the readers in good health, so that they
can pick the information straightforwardly and thoroughly.

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Table of Contents
1. LIST OF VARIABLES -----------------------------------------------------------------------------------------------------------4
1.1. DEPENDENT VARIABLE-------------------------------------------------------------------------------------------------------4
1.2. INDEPENDENT VARIABLES ---------------------------------------------------------------------------------------------------4
1.3. EXPLANATION OF DEPENDENT VARIABLE ---------------------------------------------------------------------------------4
1.4. EXPLANATION OF INDEPENDENT VARIABLE -------------------------------------------------------------------------------4
1.4.1. Less Export-------------------------------------------------------------------------------------------------------------4
1.4.2. Over population--------------------------------------------------------------------------------------------------------4
1.4.3. Issuance of Currency Notes----------------------------------------------------------------------------------------4
1.4.4. Inflation ------------------------------------------------------------------------------------------------------------------4
1.4.5. Foreign Loans----------------------------------------------------------------------------------------------------------5
1.4.6. Unemployment---------------------------------------------------------------------------------------------------------5
1.4.7. Less Demand of Home Products----------------------------------------------------------------------------------5
1.4.8. Deficit Financing-------------------------------------------------------------------------------------------------------5
1.4.9. Terrorism----------------------------------------------------------------------------------------------------------------5
1.4.10. Economic Instability --------------------------------------------------------------------------------------------------5
1.4.11. More Imports -----------------------------------------------------------------------------------------------------------5
1.4.12. Natural Calamities ----------------------------------------------------------------------------------------------------5
1.4.13. Underutilization of Natural Resources ---------------------------------------------------------------------------5
2. QUESTIONNAIRE----------------------------------------------------------------------------------------------------------------6
3. SPSS DATA VIEW ---------------------------------------------------------------------------------------------------------------7
4. SPSS VARIABLE VIEW --------------------------------------------------------------------------------------------------------8
5. DESCRIPTIVE ANALYSIS-----------------------------------------------------------------------------------------------------9
5.1. CURRENCY---------------------------------------------------------------------------------------------------------------------9
5.2. EXPORTS-----------------------------------------------------------------------------------------------------------------------9
5.3. OVERPOPULATION ---------------------------------------------------------------------------------------------------------- 10
5.4. CURRENCY NOTES --------------------------------------------------------------------------------------------------------- 11
5.5. INFLATION -------------------------------------------------------------------------------------------------------------------- 12
5.6. LOANS ------------------------------------------------------------------------------------------------------------------------ 12
5.7. UNEMPLOYMENT ------------------------------------------------------------------------------------------------------------ 13
5.8. RESERVES ------------------------------------------------------------------------------------------------------------------- 14
5.9. HOME PRODUCTS ----------------------------------------------------------------------------------------------------------- 14
5.10. TERRORISM------------------------------------------------------------------------------------------------------------------ 15
5.11. NATURAL CALAMITIES------------------------------------------------------------------------------------------------------ 16
5.12. NATURAL RESOURCES----------------------------------------------------------------------------------------------------- 17
6. MULTIPLE REGRESSIONS OF ALL FACTORS ---------------------------------------------------------------------- 18
6.1. HYPOTHESIS----------------------------------------------------------------------------------------------------------------- 18
6.2. NULL HYPOTHESIS (HO)--------------------------------------------------------------------------------------------------- 18
6.3. ALTERNATIVE HYPOTHESIS (H1) ----------------------------------------------------------------------------------------- 18
6.4. F-RATIO ---------------------------------------------------------------------------------------------------------------------- 18

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6.5. P-VALUE --------------------------------------------------------------------------------------------------------------------- 18
6.6. COEFFICIENT OF DETERMINATION (R^2)-------------------------------------------------------------------------------- 19
6.7. LEVEL OF INTERVAL -------------------------------------------------------------------------------------------------------- 19
6.8. LEVEL OF SIGNIFICANCE (ALPHA) ---------------------------------------------------------------------------------------- 19
7. MODEL---------------------------------------------------------------------------------------------------------------------------- 20
7.1. CONSTANT OF DEPENDENT VARIABLE----------------------------------------------------------------------------------- 20
7.2. CURRENCY V/S NATURAL CALAMITIES---------------------------------------------------------------------------------- 20
7.3. CURRENCY V/S ECONOMIC CONDITION--------------------------------------------------------------------------------- 20
7.4. CURRENCY V/S EXPORTS------------------------------------------------------------------------------------------------- 20
7.5. CURRENCY V/S HOME PRODUCTS--------------------------------------------------------------------------------------- 20
7.6. CURRENCY V/S IMPORTS ------------------------------------------------------------------------------------------------- 21
7.7. CURRENCY V/S INFLATION------------------------------------------------------------------------------------------------ 21
7.8. CURRENCY V/S FOREIGN LOANS ---------------------------------------------------------------------------------------- 21
7.9. CURRENCY V/S CURRENCY NOTES ------------------------------------------------------------------------------------- 21
7.10. CURRENCY V/S OVERPOPULATION -------------------------------------------------------------------------------------- 21
7.11. CURRENCY V/S RESERVES ----------------------------------------------------------------------------------------------- 22
7.12. CURRENCY V/S NATURAL RESOURCES--------------------------------------------------------------------------------- 22
7.13. CURRENCY V/S TERRORISM---------------------------------------------------------------------------------------------- 22
7.14. CURRENCY V/S UNEMPLOYMENT ---------------------------------------------------------------------------------------- 22
8. MULTIPLE REGRESSIONS OF FINAL 6 INDEPENDENT VARIABLES---------------------------------------- 23
9. MODEL---------------------------------------------------------------------------------------------------------------------------- 24
9.1. INTERPRETATION------------------------------------------------------------------------------------------------------------ 24
9.1.1. Constant of Dependent Variable -------------------------------------------------------------------------------- 24
9.1.2. Currency V/S Natural Calamities-------------------------------------------------------------------------------- 24
9.1.3. Currency V/S Home Products------------------------------------------------------------------------------------ 24
9.1.4. Currency V/S Imports ---------------------------------------------------------------------------------------------- 24
9.1.5. Currency V/S Inflation---------------------------------------------------------------------------------------------- 24
9.1.6. Currency V/S Currency Notes ----------------------------------------------------------------------------------- 25
9.1.7. Currency V/S Terrorism ------------------------------------------------------------------------------------------- 25
10. CONCLUSION ------------------------------------------------------------------------------------------------------------------ 26

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1. List of Variables
1.1. Dependent Variable
Currency Devaluation in Pakistan
1.2. Independent Variables
Less Exports
Overpopulation
Issuance of Currency Notes
Inflation
Foreign Loans
Unemployment
Less demand of Home Products
Deficit Financing
Terrorism
Economic Instability
More imports
Natural Calamities
Underutilization of Natural Resources
1.3. Explanation of Dependent Variable
Currency devaluation means the fall in the value of currency of any country as compare to the
currencies of other countries of the world. There are many demerits of the currency devaluation
but it also has some merits. Some important reasons of currency devaluation have been
defined below.
1.4. Explanation of Independent Variable
1.4.1. Less Export
Less exports of home products in the international market is the major reason of
currency devaluation. There is too much area in Pakistan which is not being cultivated.
This area can produce product which can be exported abroad that makes the
economic conditions stable.
1.4.2. Over population
Population in Pakistan is increasing very rapidly. Too meet the currency needs of this
increasing population the Govt. has to issue notes. And they may become able to
fulfill their routine needs.
1.4.3. Issuance of Currency Notes
The State Bank of Pakistan is issuing currency notes speedily to meet the public
needs that are the reason of currency devaluation in Pakistan. According to the
Quantity Theory of Money, when the quantity of money is increased, its value
automatically decreased.
1.4.4. Inflation
Inflation is the situation when prices of the products increases more than the income
level of the people. As a result the purchasing power of the people becomes less.
High prices of the products create the necessity of issuing notes to meet the basic
needs and other requirements.

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1.4.5. Foreign Loans
Another worse cause of currency devaluation in Pakistan is the foreign loan. Our
political leader takes loans from the other developed countries at the name of
countries welfare or development. But actually loans are not used properly that leads
to currency devaluation. Moreover, we have to pay interest there on.
1.4.6. Unemployment
It is the situation where people are able to do any job but they could not get job or
work or they get job of less than their abilities. This thing hinders the country to grow
up and becomes the reason of currency devaluation in Pakistan.
1.4.7. Less Demand of Home Products
Less demand of home products is also the biggest reason of currency devaluation in
Pakistan. Exports cannot be made if there is less demand of home products in the
international market and the foreign investors cannot be attracted to our country to
invest their capital.
1.4.8. Deficit Financing
Deficit financing means the issuance of note by the State Bank of Pakistan without
keeping any kind of reserves. In the present situation the reserve keeping rate is 33%.
But when State Bank issue notes without keeping any reserve, it leads to currency
devaluation.
1.4.9. Terrorism
In the present situation the biggest reason of currency devaluation in Pakistan is the
Terrorism. Daily bum blasts becomes the cause of huge loss of lives and resource.
Due to this the resources of nation are continuously wasting that leads to currency
devaluation.
1.4.10. Economic Instability
Economic instability is also the reason of currency devaluation in Pakistan. Everyday
all political parties generates disputes on the basis of religion, cast and many other
things. Moreover elections are held after short time that is the loss of resources and
as well as currency devaluation.
1.4.11. More Imports
The public of Pakistan prefers to buy the foreign products because of the better
quality of goods. If imports are more and exports are less then balance of payment
becomes unfavorable that leads to currency devaluation.
1.4.12. Natural Calamities
Natural Calamities lead to currency devaluation in all over the world. The most recent
examples of the effect of natural calamities are the earth-quake of 2006 and flood of
2010. If we look back in the history of Pakistan we come to know that after every
natural calamity the currency of Pakistan had been lost its worth.
1.4.13. Underutilization of Natural Resources
Another reason of the currency devaluation in Pakistan is the underutilization of
natural resources. God has gifted Pakistan with a lot of natural resources but
unfortunately these resources are not being properly utilized. If these resources utilize
properly then the currency of Pakistan can be stable.

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2. Questionnaire

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3. SPSS Data View

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4. SPSS Variable View

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5. Descriptive Analysis
5.1. Currency
The following analysis has been performed on the data relating to the currency:
Mean = 2.80
It is the representative of value of whole data of the currency. It is the arithmetic average of
numerical data. It is the most common measure of central tendency.
Median = 3
It is the most repeating value of the arranged data. It is the appropriate measure of central
tendency. It is the midpoint of a distribution that the same number of scores is above the
median as below.
Standard Deviation = 0.957
It tells us that how much data is dispersed. It is the most commonly used measure of the
variability.
Lower Quartile = 2
It is the middle value of the first half of the data that is distributed by the median.
Upper Quartile = 4
Median distributes the whole data into two halves and it is the middle value of second half of
the data.
4321
10
5
0
C1
Frequency
Curve
Histogram of Currency, with Normal
This is a negatively distributed curve because the tail on the left hand is longer than on the right
hand and most of the data is lying at the end of the distribution.
Mean < Median < Mode
5.2. Exports
The following analysis has been performed on the data relating to the currency:
Mean = 2.44
It is the representative of value of whole data of the currency. It is the arithmetic average of
numerical data. It is the most common measure of central tendency.
Median = 3
It is the most repeating value of the arranged data. It is the appropriate measure of central
tendency. It is the midpoint of a distribution that the same number of scores is above the
median as below.
Standard Deviation = 0.961
It tells us that how much data is dispersed. It is the most commonly used measure of the
variability.
Lower Quartile = 2

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It is the middle value of the first half of the data that is distributed by the median.
Upper Quartile = 3
Median distributes the whole data into two halves and it is the middle value of second half of
the data.
4321
10
5
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C2
Frequency
Curve
Histogram of Exports, with Normal
This is a normally distributed curve because the tails on the both side are equal that is showing
that most of the data lies in the mid of the distribution.
Mean = Median = Mode
5.3. Overpopulation
The following analysis has been performed on the data relating to the currency:
Mean = 2.360
It is the representative of value of whole data of the currency. It is the arithmetic average of
numerical data. It is the most common measure of central tendency.
Median = 2.00
It is the most repeating value of the arranged data. It is the appropriate measure of central
tendency. It is the midpoint of a distribution that the same number of scores is above the
median as below.
Standard Deviation = 0.995
It tells us that how much data is dispersed. It is the most commonly used measure of the
variability.
Lower Quartile = 2
It is the middle value of the first half of the data that is distributed by the median.
Upper Quartile = 3
Median distributes the whole data into two halves and it is the middle value of second half of
the data.

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4321
10
5
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C3
Frequency
Normal Curve
Histogram of Overpopulation, with
This is a normally distributed curve because the tails on the both side are equal that is showing
that most of the data lies in the mid of the distribution.
Mean = Median = Mode
5.4. Currency Notes
The following analysis has been performed on the data relating to the currency:
Mean = 1.96
It is the representative of value of whole data of the currency. It is the arithmetic average of
numerical data. It is the most common measure of central tendency.
Median = 2
It is the most repeating value of the arranged data. It is the appropriate measure of central
tendency. It is the midpoint of a distribution that the same number of scores is above the
median as below.
Standard Deviation = 0.790
It tells us that how much data is dispersed. It is the most commonly used measure of the
variability.
Lower Quartile = 1
It is the middle value of the first half of the data that is distributed by the median.
Upper Quartile = 2
Median distributes the whole data into two halves and it is the middle value of second half of
the data.
4321
10
5
0
C4
Frequency
Normal Curve
Histogram of Currency Notes, with
This is a positively distributed curve because the tail on the right hand side is longer than on left
hand side and most of the data is lying in the start of the distribution.
Mean > Median > Mode

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5.5. Inflation
The following analysis has been performed on the data relating to the currency:
Mean = 1.88
It is the representative of value of whole data of the currency. It is the arithmetic average of
numerical data. It is the most common measure of central tendency.
Median = 2
It is the most repeating value of the arranged data. It is the appropriate measure of central
tendency. It is the midpoint of a distribution that the same number of scores is above the
median as below.
Standard Deviation = 0.781
It tells us that how much data is dispersed. It is the most commonly used measure of the
variability.
Lower Quartile = 1
It is the middle value of the first half of the data that is distributed by the median.
Upper Quartile = 2.5
Median distributes the whole data into two halves and it is the middle value of second half of
the data.
321
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C5
Frequency
Curve
Histogram of Inflation, with Normal
This is a normally distributed curve because the tails on the both side are equal that is showing
that most of the data lies in the mid of the distribution.
Mean = Median = Mode
5.6. Loans
The following analysis has been performed on the data relating to the currency:
Mean = 2.96
It is the representative of value of whole data of the currency. It is the arithmetic average of
numerical data. It is the most common measure of central tendency.
Median = 3
It is the most repeating value of the arranged data. It is the appropriate measure of central
tendency. It is the midpoint of a distribution that the same number of scores is above the
median as below.
Standard Deviation = 1.541
It tells us that how much data is dispersed. It is the most commonly used measure of the
variability.
Lower Quartile = 1.5
It is the middle value of the first half of the data that is distributed by the median.
Upper Quartile = 4

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Median distributes the whole data into two halves and it is the middle value of second half of
the data.
54321
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6
5
4
3
2
1
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C6
Frequency
Curve
Histogram of Loans, with Normal
This is a normally distributed curve because the tails on the both side are equal and from the
mid the curve is touching its peak.
Mean = Median = Mode
5.7. Unemployment
The following analysis has been performed on the data relating to the currency:
Mean = 2.68
It is the representative of value of whole data of the currency. It is the arithmetic average of
numerical data. It is the most common measure of central tendency.
Median = 2
It is the most repeating value of the arranged data. It is the appropriate measure of central
tendency. It is the midpoint of a distribution that the same number of scores is above the
median as below.
Standard Deviation = 1.314
It tells us that how much data is dispersed. It is the most commonly used measure of the
variability.
Lower Quartile = 2
It is the middle value of the first half of the data that is distributed by the median.
Upper Quartile = 3.5
Median distributes the whole data into two halves and it is the middle value of second half of
the data.
54321
10
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C7
Frequency
Normal Curve
Histogram of Unemployment, with

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This is a positively distributed curve because the tail on the right hand side is longer than on left
hand side and most of the data is lying in the start of the distribution.
Mean > Median > Mode
5.8. Reserves
The following analysis has been performed on the data relating to the currency:
Mean = 3.56
It is the representative of value of whole data of the currency. It is the arithmetic average of
numerical data. It is the most common measure of central tendency.
Median = 4
It is the most repeating value of the arranged data. It is the appropriate measure of central
tendency. It is the midpoint of a distribution that the same number of scores is above the
median as below.
Standard Deviation = 1.417
It tells us that how much data is dispersed. It is the most commonly used measure of the
variability.
Lower Quartile = 2
It is the middle value of the first half of the data that is distributed by the median.
Upper Quartile = 5
Median distributes the whole data into two halves and it is the middle value of second half of
the data.
54321
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8
7
6
5
4
3
2
1
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C9
Frequency
Curve
Histogram of Reserves, with Normal
This is a negatively distributed curve because the tail on the left hand is longer than on the right
hand and most of the data is lying at the end of the distribution.
Mean < Median < Mode
5.9. Home products
The following analysis has been performed on the data relating to the currency:
Mean = 2.76
It is the representative of value of whole data of the currency. It is the arithmetic average of
numerical data. It is the most common measure of central tendency.
Median = 3
It is the most repeating value of the arranged data. It is the appropriate measure of central
tendency. It is the midpoint of a distribution that the same number of scores is above the
median as below.
Standard Deviation = 1.268
It tells us that how much data is dispersed. It is the most commonly used measure of the
variability.

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Lower Quartile = 2
It is the middle value of the first half of the data that is distributed by the median.
Upper Quartile = 4
Median distributes the whole data into two halves and it is the middle value of second half of
the data.
54321
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7
6
5
4
3
2
1
0
C8
Frequency
Normal Curve
Histogram of Home Products, with
This is a positively distributed curve because the tail on the right hand side is longer than on left
hand side and most of the data is lying in the start of the distribution.
Mean > Median > Mode
5.10. Terrorism
The following analysis has been performed on the data relating to the currency:
Mean = 2.36
It is the representative of value of whole data of the currency. It is the arithmetic average of
numerical data. It is the most common measure of central tendency.
Median = 2
It is the most repeating value of the arranged data. It is the appropriate measure of central
tendency. It is the midpoint of a distribution that the same number of scores is above the
median as below.
Standard Deviation = 0.995
It tells us that how much data is dispersed. It is the most commonly used measure of the
variability.
Lower Quartile = 2
It is the middle value of the first half of the data that is distributed by the median.
Upper Quartile = 3
Median distributes the whole data into two halves and it is the middle value of second half of
the data.

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54321
10
5
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C10
Frequency
Curve
Histogram of Terrorism, with Normal
This is a positively distributed curve because the tail on the right hand side is longer than on left
hand side and most of the data is lying in the start of the distribution.
Mean > Median > Mode
5.11. Natural Calamities
The following analysis has been performed on the data relating to the currency:
Mean = 2.68
It is the representative of value of whole data of the currency. It is the arithmetic average of
numerical data. It is the most common measure of central tendency.
Median = 2
It is the most repeating value of the arranged data. It is the appropriate measure of central
tendency. It is the midpoint of a distribution that the same number of scores is above the
median as below.
Standard Deviation = 1.249
It tells us that how much data is dispersed. It is the most commonly used measure of the
variability.
Lower Quartile = 2
It is the middle value of the first half of the data that is distributed by the median.
Upper Quartile = 4
Median distributes the whole data into two halves and it is the middle value of second half of
the data.
54321
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7
6
5
4
3
2
1
0
C13
Frequency
Normal Curve
Histogram of Natural Clamities, with
This is a positively distributed curve because the tail on the right hand side is longer than on left
hand side and most of the data is lying in the start of the distribution.
Mean > Median > Mode

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5.12. Natural Resources
The following analysis has been performed on the data relating to the currency:
Mean = 1.920
It is the representative of value of whole data of the currency. It is the arithmetic average of
numerical data. It is the most common measure of central tendency.
Median = 1.00
It is the most repeating value of the arranged data. It is the appropriate measure of central
tendency. It is the midpoint of a distribution that the same number of scores is above the
median as below.
Standard Deviation = 1.222
It tells us that how much data is dispersed. It is the most commonly used measure of the
variability.
Lower Quartile = 1
It is the middle value of the first half of the data that is distributed by the median.
Upper Quartile = 2.5
Median distributes the whole data into two halves and it is the middle value of second half of
the data.
54321
10
5
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C14
Frequency
Normal Curve
Histogram of Natural Resources, with
This is a positively distributed curve because the tail on the right hand side is longer than on left
hand side and most of the data is lying in the start of the distribution.
Mean > Median > Mode

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6. Multiple Regressions of all Factors
Factors Names P-values
Currency y 0.0136
Natural Calamities X1 0.1526
Economic Conditions X2 0.6700
Exports X3 0.6347
Home Products X4 0.3375
Imports X5 0.3017
Inflation X6 0.3634
Foreign Loans X7 0.4107
Currency Notes X8 0.2724
Overpopulation X9 0.5288
Reserves X10 0.4334
Natural Resources X11 0.8776
Terrorism X12 0.3944
Unemployment X13 0.9875
F-Ratio = 0.83
P-Value = 0.6335
R^2 = 49.3811
6.1. Hypothesis
To write the ideas in a statement is called Hypothesis or Preposition.
6.2. Null Hypothesis (Ho)
It means that there is no significance relationship between two variables.
6.3. Alternative Hypothesis (H1)
It means that there is a significance relationship between two variables.
6.4. F-Ratio
F-ratio is the value that tests the model that either it is good or bad. If the value is high then the
model is good fit and if the value is low then the model is not good fit.
6.5. P-Value
P-value is the probability of accepting the Null hypothesis.

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6.6. Coefficient of Determination (R^2)
Coefficient of determination is the explanatory power of the model. If it is more than 90 then the
model is better and if it does not cross 35 then the model is not good fit.
6.7. Level of Interval
It means that how much you are confident upon your preposition.
6.8. Level of Significance (Alpha)
It describes that how much you are doubtful upon your prepositioning simple words ‘the
probability of making wrong conclusion about the importance of a variable’. The lower this
probability leads to the higher statistical significance. Most of the time it remains fixed up to 5%.

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7. Model
Y =5.7219 + 0.4976x1 - 0.1899x2 - 0.2143x3 - 0.3137x4 - 0.3127x5 - 0.3472x6 - 0.1998x7 - 0.4706x8
+ 0.2615x9 - 0.2142x10 - 0.0495x11 - 0.2952x12 - 0.0040x13
7.1. Constant of Dependent Variable
Constant of the dependent variable is 5.7219. It is showing that if all independent variables
become ‘0’ then the value of ‘y’ will be minimum of 5.7219.Its p-value is 0.0136. It is very
important dependent variable because:
P-Value < Alpha
0.01363 < 0.5
So we reject Ho
7.2. Currency V/S Natural Calamities
If x1 increase with 1 unit then they will increase with ‘y’ 0.4976 and vice versa. Its p-value is
0.1526. It is an important independent variable because:
P-Value < Alpha
0.1526 < 0.5
So we reject Ho
7.3. Currency V/S Economic Condition
If x2 increase with 1 unit the then ‘y’ will decrease with 0.1899 and vice versa. Its p-value is
0.6700. It is not an important independent variable because:
P-Value >Alpha
0.6700 > 0.5
So we reject H1
7.4. Currency V/S Exports
If x3 increase with 1 unit then the ‘y’ will decrease with 0.2143 and vice versa. Its p-value is
0.6347. It is not an important independent variable because:
P-Value >Alpha
0.6347 > 0.5
So we reject H1
7.5. Currency V/S Home Products
If x4 increase with 1 unit then the ‘y’ will decrease with 0.3137 and vice versa. Its p-value is
0.3375. It is an important independent variable because:
P-Value < Alpha

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0.3375 < 0.5
So we reject Ho
7.6. Currency V/S Imports
If x5 increase with 1 unit then the ‘y’ will decrease with 0.3127 and vice versa. Its p-value is
0.3017. It is an important independent variable because:
P-Value < Alpha
0.3017 < 0.5
So we reject Ho
7.7. Currency V/S Inflation
If x6 increase with 1 unit then the ‘y’ will decrease with 0.3472 and vice versa. Its p-value is
0.3634. It is an important independent variable because:
P-Value < Alpha
0.3634 < 0.5
So we reject Ho
7.8. Currency V/S Foreign Loans
If x7 increase with 1 unit then the ‘y’ will decrease with 0.1998 and vice versa. Its p-value is
0.4107. It is an important independent variable because:
P-Value < Alpha
0.4107 < 0.5
So we reject Ho
7.9. Currency V/S Currency Notes
If x8 increase with 1 unit then the ‘y’ will decrease with 0.4706 and vice versa. Its p-value is
0.2724. It is an important independent variable because:
P-Value < Alpha
0.2724 < 0.5
So we reject Ho
7.10. Currency V/S Overpopulation
If x9 increase with 1 unit then the ‘y’ will increase with 0.2615 and vice versa. Its p-value is
0.5288. It is not an important independent variable because:
P-Value >Alpha
0.5288 > 0.5
So we reject H1

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7.11. Currency V/S Reserves
If x10 increase with 1 unit then the ‘y’ will decrease with 0.2142 and vice versa. Its p-value is
0.4334. It is an important independent variable because:
P-Value < Alpha
0.4334 < 0.5
So we reject Ho
7.12. Currency V/S Natural Resources
If x11 increase with 1 unit then the ‘y’ will decrease with 0.0495 and vice versa. Its p-value is
0.8776. It is not an important independent variable because:
P-Value >Alpha
0.8776 > 0.5
So we reject H1
7.13. Currency V/S Terrorism
If x12 increase with 1 unit then the ‘y’ will decrease with 0.2952 and vice versa. Its p-value is
0.3944. It is an important independent variable because:
P-Value < Alpha
0.3944 < 0.5
So we reject Ho
7.14. Currency V/S Unemployment
If x13 increase with 1 unit then the ‘y’ will decrease with 0.0040 and vice versa. Its p-value is
0.9875. It is an important independent variable because:
P-Value >Alpha
0.9875 > 0.5
So we reject H1

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8. Multiple Regressions of final 6 Independent Variables
Factors Names P-values
Currency Y 0.0005
Natural Calamities X1 0.1525
Home Products X2 0.1988
Imports X3 0.4870
Inflation X4 0.4718
Notes X5 0.3798
Terrorism X6 0.2915
F-Ratio = 1.66
P-Value = 0.1886
R^2 = 95.6092

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9. Model
Y = 3.91047 + 0.2277x1 – 0.1979x2 + 0.0784x3 – 0.1946x4 -0.2595x5 – 0.2148x6
9.1. Interpretation
9.1.1. Constant of Dependent Variable
Constant of the dependent variable is 3.91047. It is showing that if all independent
variables become ‘0’ then the value of ‘y’ will be minimum of 0.91047.Its p-value is
0.0136. It is very important dependent variable because:
P-Value < Alpha
0.0005 < 0.5
So we reject Ho
9.1.2. Currency V/S Natural Calamities
If x1 increase with 1 unit then they will increase with ‘y’ 0.2277 and vice versa. Its p-
value is 0.1525. It is an important independent variable because:
P-Value < Alpha
0.1525 < 0.5
So we reject Ho
9.1.3. Currency V/S Home Products
If x4 increase with 1 unit then the ‘y’ will decrease with 0.0.1980 and vice versa. Its p-
value is 0.1988. It is an important independent variable because:
P-Value < Alpha
0.1988 < 0.5
So we reject Ho
9.1.4. Currency V/S Imports
If x5 increase with 1 unit then the ‘y’ will increase with 0.0784 and vice versa. Its p-
value is 0.4870. It is an important independent variable because:
P-Value < Alpha
0.4870 < 0.5
So we reject Ho
9.1.5. Currency V/S Inflation
If x6 increase with 1 unit then the ‘y’ will decrease with 0.1946and vice versa. Its p-
value is 0.4718. It is an important independent variable because:
P-Value < Alpha

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0.4718 < 0.5
So we reject Ho
9.1.6. Currency V/S Currency Notes
If x8 increase with 1 unit then the ‘y’ will decrease with 0.2595 and vice versa. Its p-
value is 0.3798. It is an important independent variable because:
P-Value < Alpha
0.3798 < 0.5
So we reject Ho
9.1.7. Currency V/S Terrorism
If x12 increase with 1 unit then the ‘y’ will decrease with 0.2148 and vice versa. Its p-
value is 0.2915. It is an important independent variable because:
P-Value < Alpha
0.2915 < 0.5
So we reject Ho

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10. Conclusion
After making the all analysis we have come to know that the second model is the best model which is
Y = 3.91047 + 0.2277x1 – 0.1979x2 + 0.0784x3 – 0.1946x4 -0.2595x5 – 0.2148x6. Because the P-
value of this model is 0.1886 and the p-value of first model of all factors is 0.6335. It is showing that
there is the less probability of accepting the Null hypothesis.
F-Ratio of this model is 1.66 whereas the F-Ratio of first model is 0.83. F-Ratio of this model is high
that is why it is a best model.
Coefficient of determination of this model is 95.6092 and on the other hand the coefficient of
determination of first model is 49.384. Coefficient of determination of this model is high. After
comparing both of these models we can say that the second model is the best model.