Paradigms
A Research Journal of Commerce, Economics, and Social Sciences
Online ISSN: 2410-0854
Print ISSN: 1996-2800
 
     
 

Paradigms Journal

EXCHANGE RATE INSTABILITY AND SECTORAL EXPORTS: EVIDENCE FROM PAKISTAN
Author(s) :
Muhammad Haseeb (Lahore, Pakistan)
Muhammad Awais Iqbal
Abstract
Exports of a country is one of the main factors indicating economic health of a country and fluctuating exchange rates and relative price can significantly affect the level of exports and it is an alarming situation for a country when its exports are affected by exchange rate volatility. Impact of exchange rate volatility and relative price on trade has been a heated debate in the field of finance and most of work has been done on aggregate and bilateral, trade. Few researchers are found on product basis especially in the senario of Pakistan. This research will provide an an overview of the exports of 13 different products from pakistan. Secondary data is used to analyze the impact of exchange rate instabiltiy on the exports of different products from Pakistan to all over the world. Significance of the study depends on the right choice of estimation method. We use auto regressive distribustive lags (ARDL) method to check relationship of two main variables. Glass, meat and paper and board products show that relative price affects negatively to exports so Government should make policies to strengthen the exports of these three products. Government can provide subsidies on these products in order to boost up the exports and make these products competitive in international market. Under the shadow of our results we conclude that exchange rate volatility has significant negative relationship with the exports of food processing machinery, grapes,meat and petroleum products so government needs to be focued on it when exxchange rate are highly instable. Ironand steel bars show short run negative impact of exchange rate however this impact in adjusted in the long run.
Keywords: Exchange Rate; Instability; Sectorial Exports; ARDL; Pakistan.
 
 

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