Abstract
Valuations of currencies and their variability are often noted to have inexplicable aftermaths on international trade, and the overall economic performance. This paper sets to find out empirically, the effects of financial crisis on international trade. We limited our study by focusing on the relationship between exchange rate volatility versus finance for the Cameroonian economy using a time series of 40 years; 1975-2015. We calculated the standard deviation for exchange rate to get the values for exchange rate volatility, meanwhile values for exports, exchange rate and WGR were obtained from various sources as outlined in chapter three. Using the gravity model of international trade, we found that, exchange rate, its volatility, and world growth rate determines the degree or the exports level an economy may achieve for a given period of time. Using data for Cameroon, I found a significant and positive relationship for the three mentioned factors (exchange rate, exchange volatility, and world growth rate) with exports. That is high exchange rates encourage Cameroonians and Cameroon businesses to engage more in exports. We strongly suggest and recommend a unique and single currency for the Cameroonian economy.
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