Abstract
This main goal of this study is to check the exchange rate fluctuations and its impact on trade balance in Pakistan. The annual time series data from 1971 to 2016 is used to check the short run and long run relationship between Exchange rate fluctuations trade balance of Pakistan. We employed the autoregressive distributed lag approach and results reveal that Exchange rate has positive and significant relationship with balance of trade in long run and short run. Devaluation of Pakistani rupees against USD, would increase the exports and ultimately trade balance will enhance. The inflation and money supply has negative and significant relationship with balance of trade in long run in Pakistan. The excess of money supply will increase inflation which reduces the exports and consequently, balance of trade would decrease. This study has a policy implications for government as well as local and foreign investors. The government should also play an important role to make such strategies which can increase the balance of trade in Pakistan and can boost the economic growth of Pakistan indirectly.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
