The Pakistan rupee was devalued from Rs. 4.76 to a US dollar to Rs. 11.00 to a US dollar in May 1972 and was revalued to Rs. 9.90 to a US dollar in February 1973. The dollar has depreciated substantially since then in relation to certain currencies such as the Swiss franc, Deutsche mark, yen and the guilder. It is generally believed that the Pakistan rupee, because of its link with the dollar, has depreciated not only against the above currencies but also in an overall sense so that the rupee has been defacto devalued. An attempt has been made in this note to find out whether the rupee has been defacto devalued or over-valued. The dollar has no doubt depreciated against some strong currencies. But certain other currencies such as the pound sterling, the French franc and the Italian lira have depreciated more than the dollar so that relatively the dollar has appreciated in terms of these currencies. The Pakistan rupee, which followed the dollar, has depreciated against certain currencies and appreciated against others.