Volatility of Exchange Rate and Export Growth in Pakistan

Volatility of replacement Rate and Export Growth in Pakistan: The Structure and Interdependence in Regional Markets Khalid Mustafa Assistant professor Department of Economics, University of Karachi and Mohammed Nishat, PhD Professor and Chairman, Finance and Economics Institute of ancestry Administration, Karachi Abstract The study observationally investigates the effect of sub pose unpredictability on exportings growth between Pakistan and leading slyness partners. The countries are selected to determine the bilateral blood between Pakistan and the some other countries under various regional economic blocks such as SAARC, ASEAN, European, and Asia-Pacific regions. Cointegration and Error Correction techniques are used to establish the empirical relationship between exchange grade volatility and exports growth, utilise quarterly data from 1991:3 to 2004:2. The result indicates that the volatility of exchange rate has negative and significant effects both in the long run and short run with major distribute partners namely UK and US. Similar pattern was observe in racing shell of Australia, Bangladesh, and Singapore, where the volume of trade with Pakistan is comparatively consistent and less volatile.

The relationship between exports growth and exchange rate volatility for India and Pakistan is observed only in long run perspective. However, of countries like parvenu Zealand and Malaysia no empirical relationship is observed between export growth and exchange rate volatility. Key words: Exchange Rate, Volatility, Export growth, Regional integration 1. Introduction. The impact of exchange rate volatility on the volume of international trade has been studied intensively since the late 1970s when the exchange rate moved from resolved to flexible exchange rate, means facing a volatile real exchange rate. The theory says that higher exchange rate volatility will reduce trade by creating disbelief about future profit from export trade. By exploitation the forward markets and by managing the timing... If you want to get a wide-cut essay, order it on our website: Orderessay

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