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The Effects of Exchange Rates on Zimbabwe’s Exports

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  • Mable Chimhore
  • Shynet Chivasa

Abstract

The study reviewed the effect of exchange rates on exports in Zimbabwe using the Ordinary Least Squares (OLS) technique. The objective of the study was to examine the effects of exchange rate on export growth in Zimbabwe using mainly the multicurrency era data. This is because the exchange rate plays a key role in policy formulation and implementation. The study is significant as understanding the role of exchange rate on export guides policymakers in coming up with the right policy mix to stimulate exports. Using secondary data from ZIMSTAT and World Bank, obtained results from a robust regression showed that South Africa’s exchange rates (SAEXRT) were weakly significant at 10%, South Africa broad money supply (SAM2) was significant at 5% and imports (DDIMP) were important to Zimbabwe’s export growth at 1% level of significance. To increase exports, there is a need for policy shift, shifting from overly focusing on foreign direct investment and increasing gross domestic product (GDP) because empirical results showed that FDI and gross domestic product were not significant in the model. Policies such as trade cooperation between South Africa and Zimbabwe may increase exports given the impact of South Africa's broad money supply on Zimbabwe’s exports.

Suggested Citation

  • Mable Chimhore & Shynet Chivasa, 2021. "The Effects of Exchange Rates on Zimbabwe’s Exports," Journal of Economics and Behavioral Studies, AMH International, vol. 13(4), pages 8-16.
    • Handle: RePEc:rnd:arjebs:v:13:y:2021:i:4:p:8-16
    DOI: 10.22610/jebs.v13i4(J).3211
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    References listed on IDEAS

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    2. Sirikul Tulasombat & Somchai Ratanakomut, 2015. "The Effect of Exchange Rates on Agricultural Goods for Export: A Case of Thailand," Information Management and Business Review, AMH International, vol. 7(1), pages 1-11.
    3. Joseph Dery Nyeadi & Oswald Atiga & Charles Amoyea Atogenzoya, 2014. "The Impact of Exchange Rate Movement on Export: Empirical Evidence from Ghana," International Journal of Academic Research in Accounting, Finance and Management Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences, vol. 4(3), pages 41-48, July.
    4. Boitumelo Nnoi Yolanda Sekati & Johannes Tshepiso Tsoku & Lebotsa Daniel Metsileng & Damir Tokic, 2020. "Modelling the oil price volatility and macroeconomic variables in South Africa using the symmetric and asymmetric GARCH models," Cogent Economics & Finance, Taylor & Francis Journals, vol. 8(1), pages 1792153-179, January.
    5. Edwards, Sebastian, 1998. "Openness, Productivity and Growth: What Do We Really Know?," Economic Journal, Royal Economic Society, vol. 108(447), pages 383-398, March.
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    Cited by:

    1. Collin Chikwira, 2023. "The Foreign Exchange Auction System’s Effect on SME Stability and Performance," International Journal of Economics and Financial Issues, Econjournals, vol. 13(5), pages 96-108, September.
    2. Dieudonné Mignamissi & Bernard Nguekeng, 2022. "Trade openness-industrialization nexus revisited in Africa," Economic Change and Restructuring, Springer, vol. 55(4), pages 2547-2575, November.

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