This study examines whether the real exchange rate series of Pakistan against its major trading partners can be pronounced as a stationary process. We have used newly developed Fourier ADF (FADF) and Fourier KPSS (FKPSS) unit root tests for this purpose. Fourier types of unit root tests take into account both the multiple temporary structural breaks and nonlinearity adjustment of the recommended data. These tests are applied to the real exchange rates (RERs) of Pakistan against its twenty-one major trading partner countries. We are able to reject the null hypothesis of a unit root in case of FADF and are unable to accept the null hypothesis of stationarity in case of FKPSS in most the of cases. The results of both tests disclosed that multiple structural breaks exist in most of the cases of the RERs data. Hence it is essential to incorporate these irregular temporary multiple breaks and nonlinearity adjustment in the model while testing the stationarity or non-stationarity of the RER series. This study delivers comparatively better support in favor of PPP theory as compare to most of earlier studies. We have found support for the PPP in twelve and five out of twenty-one trading partner countries in case of FKPSS and FADF unit root tests respectively, in multi-nation version during the flexible exchange rate regime. The main policy suggestion from the outcomes of this study is that the exchange rates, foreign and domestic WPI based on PPP theory are co-integrated, for that reason, to adjust to inflation differentials the authorities must use PPP theory as a long term nominal anchor. Supervisor:- Dr. Muhammad Zakaria