Effect of Exchange Rates Volatility on Imports and Exports

Abstract

With the emergence of floating regimes, exchange rate volatility has received a lot of attention in economic research. This study used a log-linear multiple regression model to assess the impact of exchange rate fluctuations on Kenya's imports and exports during the period 1980-2015. The results show that the volatility of the real exchange rate significantly affects imports and exports. In addition, the increase in exchange rate uncertainty has had long-term adverse effects on exports, but has no effect on imports.

Keywords: Exchange rate,Import,Export,Volatility

JEL Classification: F13, F31, F62