Leading Issues in the Economy of Pakistan: Agenda for Reforms = import cover(in months), measured as the ratio of the foreign exchange reserves at end of a year with respect to the value of imports and goods during the year. It may be noticed that. This implies that the nature of the relationship is in IC and declining at a lower rate. shaped with the rise 10.2 Projection of the Exchange Rate The Model is simulated several times, with the estimates of the exogenous magnitudes in 2022-23, whereby different levels of import cover are obtained. Results of the simulations are presented in Table 10.1 below. Table 10.1: Simulations Results of Rate of Change in 2022-23 in the exchange rate Import Cover(end of 2022-23) % Change in the Exchange Rate** (Measured as the number of rupees per$) Percentage Exchange Rate per$* 1.0 57.4 322 1.2 40.7 288 1.4 29.3 264 *Per US$ in end June 2023, with the exchange rate in June 2022 of Rs 204.62 per$. ** From end-June 2022 to end-June 2023 Source: BNU Model Simulations Table 10.1 clearly demonstrates the large variation in the exchange rate with respect to the import cover. Further, based on the derived monthly rate of increase the market-determined exchange rate as of the 15 th of December is Rs 260 per US$. It is significant that this is close to the rate in the open market. The exchange rate projection by the IMF for 2022-23 can be derived from the statistics presented in Staff Report of September 1, 2022. The IMF has projected a high import cover of 2.46 months of the Pakistan economy in 2022-23. Accordingly, the Model projects that with this healthy level of reserves, the real exchange rate should fall by over 2 percent, 104