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The Effects Of Exchange Rate Variability On Exports: Evidence From Uganda (1988 – 2001)

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  • David Kihangire

    (Phd)

Abstract

Using monthly data, this study investigates the effects of exchange rate variability on Uganda’s aggregate export growth under the floating exchange rate policy regime (1994-2001), benchmarked on the fixed exchange rate regime (1988-1993). The main research question it posits is: “What is the effect of exchange rate variability on Uganda’s exports?” Premised on risk-aversion, the study tests the main hypothesis that ‘Uganda’s exports are negatively and significantly correlated with exchange rate variability.’ Due to lack of pure I(0) or I(1) for all the series, and absence of endogeneity and simultaneous bias problems between export supply and export demand, the ARDL approach to cointegration and OLS are applied in the study. The results suggest support for the research hypothesis. The policy implication is that intervention targeting the minimisation of excessive volatility in the real effective exchange rate under the floating regime may contribute to supporting export sector growth, economic growth, and overall external macroeconomic stability in Uganda.

Suggested Citation

  • David Kihangire, 2005. "The Effects Of Exchange Rate Variability On Exports: Evidence From Uganda (1988 – 2001)," International Trade 0505013, University Library of Munich, Germany.
  • Handle: RePEc:wpa:wuwpit:0505013
    Note: Type of Document - doc; pages: 40. The study was part of my Ph.D. research study at the University of Bradford.
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    Cited by:

    1. Lucas Njoroge, 2020. "The Effects of Exchange Rate Volatility on Exports in COMESA: A Panel Gravity Model Approach," Journal of Applied Finance & Banking, SCIENPRESS Ltd, vol. 10(6), pages 1-10.

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    More about this item

    Keywords

    Uganda; Exports; Exchange Rate Variability;
    All these keywords.

    JEL classification:

    • F1 - International Economics - - Trade
    • F2 - International Economics - - International Factor Movements and International Business

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