The purpose of this study is to examine whether the real exchange rate follow random walk or not. Different literature shows that the behavior of exchange rate is random walk. This is an attempt to check the random walk behavior of exchange rate. Different methodologies are used to examine this behavior of real exchange rate. For this purpose, the sample countries are China, Canada, Japan, United Kingdom, America, Switzerland and Pakistan from the period of 1990 M1 to 2016 M10S. These countries are selected because except Pakistan, the other countries including China, Canada, Japan, United Kingdom, America and Switzerland all are developed countries and a lot of literature has been studied about the movements of exchange rate in these countries and gave mixed results. Some researchers are in the favor of PPP theory, some are in the favor of monetary model for exchange rate determination. Some authors are also in the favor of random walk behavior of real exchange rate, and data is also available for these countries. Non Parametric “The Runs Tests” and “The Sequence Reversal Tests” are used to check the random walk behavior of reach exchange rate. Literature used parametric tests to check the random walk pattern of exchange rate so this study used non parametric testing to identify the random walk pattern of real exchange rate. The study also includes descriptive statistics and results from all non-parametric tests and all graphs and tables shows that the behavior of exchange rate is random walk. So we cannot predict or forecast exchange rate using fundamentals especially in the short run. Supervisor:- Dr. Atiya Yasmeen Javaid