The Impact Of Real Exchange Rate Volatility On South African Exports To The Unit

This paper empirically examines the impact of real exchange rate volatility on trade in the context of South Africa's exports to the U.S. for the South Africa's floating period January 1995-February 2007. In measuring real exchange rate volatility, this paper utilised GARCH. After establishing the existence of co-integration among the variables involved in this two-country export model, the authors estimated long-run coefficients by means of ARDL bounds testing procedure proposed by Pesaran, et al.(2001). These results indicate that real exchange rate volatility exerts a significant and negative impact on South Africa's exports to the U.S. Therefore, stable and competitive exchange rate and sound macroeconomic fundamentals are required in order to improve international competitiveness and greater penetration of South African exports to international markets.

Provided by: Forum for Research in Emprical International Trade Topic: Big Data Date Added: Jul 2010 Format: PDF

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