Does Exchange Rates Swings Affect Trade? Evidence from an Emerging Open Economy

The volatility of the exchange rate is commonplace for every open economies. If excessive, it would have severe implications country’s international trades. Using ARDL and cointegration bound tests on quarterly data [2000:Q2–2022:Q3], study empirically explore how other macroeconomic variables impacts real exports imports demands Nigeria. evidence identify trade’ parsimonious models disclose a negative as well significant short run effects volatility. estimated convergence ECM regressions indicate that rates cause decline in long run. Under this circumstance, supposes measures will curb fluctuations beyond economic fundamentals. In particular, monetary authority should expand periodic intervention to curtail excessive swings. This be maintained intuitively regularly appraise avoid creating any counter-productive response.