IDEAS home Printed from
   My bibliography  Save this book

Effective Exchange Rate Changes and their Impact on the Trade Balance


  • D.S. Wijesinghe


This study aims to analyse the impact of exchange rate changes on the trade balance, and to construct the effective exchange rate index using the simulated trade balance effects of the exchange rate changes as the weights. The study is divided into four sections. Section I reviews various indices of effective exchange rates, highlighting their uses and limitations. Section II presents a multilateral trade model appropriate to primary commodity exporting countries. The model is employed to analyse the effects of both the nominal and real exchange rate changes during 1971-1985 on the trade balance of Sri Lanka. The results are discussed in Section III. Section IV concludes the study highlighting the major observations, limitations and further research to be undertaken.

Suggested Citation

  • D.S. Wijesinghe, 1988. "Effective Exchange Rate Changes and their Impact on the Trade Balance," Research Studies, South East Asian Central Banks (SEACEN) Research and Training Centre, number rp09, April.
  • Handle: RePEc:sea:rstudy:rp09

    Download full text from publisher

    File URL:
    Download Restriction: no

    More about this item


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sea:rstudy:rp09. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Azharin). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.