Abstract
The South Asian Journal of Finance is an international open access and double-blind peer reviewed journal focusing on the areas of finance in South Asian region. It is published bi-annually (June and December).
Highlights
Globalization has led the researchers to move into International trade as an emerging area, which focuses on the macroeconomy instead of the individual markets
In examining the relationship between international trade and exchange rate, the majority of the literature investigate the impact of exchange rate on imports and exports whereas; this study contributes to the literature by examining the impact of exports and imports on exchange rate over the short and long-time horizons
Even though many past studies are conducted to examine the relationship between international trade and exchange rate, most of the literature investigates the impact of the exchange rate on imports and exports whereas, this study contributes to the literature by examining the impact of exports and imports on the exchange rate
Summary
Globalization has led the researchers to move into International trade as an emerging area, which focuses on the macroeconomy instead of the individual markets. International trade compacts on the macroeconomic factors that occur between two or more countries. International trade has two main aspects, namely, exports and imports. The exports of a country are considered as one of the main driving forces in determining the wealth of a nation. There should be a value exchange mode to carry out the trade which is known as exchange rate. The exchange rates of the two countries are not constant over time due to the demand and supply of foreign currencies. The exchange rate can be considered as one of the main factors under international trade as it is consistent with both exports and imports. Exchange rate fluctuations occur due to the demand and supply of a particular currency that would float freely on a recurrent basis.
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