diff --git a/packages/hoppscotch-app/helpers/utils/EffectiveURL.ts b/packages/hoppscotch-app/helpers/utils/EffectiveURL.ts
index fbdad1a6b..e8e8e08ff 100644
--- a/packages/hoppscotch-app/helpers/utils/EffectiveURL.ts
+++ b/packages/hoppscotch-app/helpers/utils/EffectiveURL.ts
@@ -14,6 +14,7 @@ import {
   HoppRESTHeader,
   HoppRESTParam,
 } from "@hoppscotch/data"
+import { parseTemplateStringV } from "@hoppscotch/data/src/pathVariables"
 import { arrayFlatMap, arraySort } from "../functional/array"
 import { toFormData } from "../functional/formData"
 import { tupleToRecord } from "../functional/record"
@@ -306,7 +307,7 @@ export function getEffectiveRESTRequest(
 
   return {
     ...request,
-    effectiveFinalURL: parseTemplateString(
+    effectiveFinalURL: parseTemplateStringV(
       request.endpoint,
       envVariables,
       request.vars
diff --git a/packages/hoppscotch-data/src/pathVariables.ts b/packages/hoppscotch-data/src/pathVariables.ts
new file mode 100644
index 000000000..20ad20f5b
--- /dev/null
+++ b/packages/hoppscotch-data/src/pathVariables.ts
@@ -0,0 +1,75 @@
+import { pipe } from "fp-ts/function"
+import * as E from "fp-ts/Either"
+import {parseTemplateStringE} from "./environment";
+
+export type Environment = {
+  name: string
+  variables: {
+    key: string
+    value: string
+  }[]
+}
+
+export type Variables = {
+  key: string
+  value: string
+}[]
+
+const REGEX_ENV_VAR = /<<([^>]*)>>/g // "<<myVariable>>"
+const REGEX_PATH_VAR = /{{([^>]*)}}/g // "{{myVariable}}"
+
+/**
+ * How much times can we expand environment variables
+ */
+const ENV_MAX_EXPAND_LIMIT = 10
+
+/**
+ * Error state when there is a suspected loop while
+ * recursively expanding variables
+ */
+const ENV_EXPAND_LOOP = "ENV_EXPAND_LOOP" as const
+
+export function parseTemplateStringEV(
+  str: string,
+  variables: Environment["variables"],
+  pathVariables: Variables
+) {
+  if (!variables || !str || !pathVariables) {
+    return E.right(str)
+  }
+
+  let result = str
+  let depth = 0
+
+  while (result.match(REGEX_ENV_VAR) != null && depth <= ENV_MAX_EXPAND_LIMIT) {
+    result = decodeURI(encodeURI(result)).replace(
+      REGEX_ENV_VAR,
+      (_, p1) => variables.find((x) => x.key === p1)?.value || ""
+    )
+    depth++
+  }
+
+  while (result.match(REGEX_PATH_VAR) != null && depth <= ENV_MAX_EXPAND_LIMIT) {
+    result = decodeURI(encodeURI(result)).replace(
+      REGEX_PATH_VAR,
+      (_, p1) => pathVariables.find((x) => x.key === p1)?.value || ""
+    )
+  }
+
+  return depth > ENV_MAX_EXPAND_LIMIT
+    ? E.left(ENV_EXPAND_LOOP)
+    : E.right(result)
+}
+
+/**
+ * @deprecated Use `parseTemplateStringEV` instead
+ */
+export const parseTemplateStringV = (
+  str: string,
+  variables: Environment["variables"],
+  pathVariables: Variables
+) =>
+  pipe(
+    parseTemplateStringEV(str, variables, pathVariables),
+    E.getOrElse(() => str)
+  )