For both developed and emerging countries, foreign exchange market is the oldest and intense one among the financial markets because of the financial integration and exchange rate crisis after the 1960s. The foreign exchange market is the center of attention not only for the firms but also for the people on the street. Exchange rate that is the principal of foreign exchange market is the key source of this attention. Here, the important problem is the determination of the real exchange rate. There are various points of view made by authors in the economics literature.