Assessing the Impact of Exchange Rates on Economic Growth: An Empirical Study

Abstract

Economic development is indiscernible for any country or any community. Global efforts are inclined towards the key objectives of achieving economic development. In this study, an attempt has been made to examine the effect of exchange rates on the economic development. This study was based on the secondary data from the year 1990 to 2019.  Although panel data was used, but autoregressive distributive lag test was also employed in this study. We used ARDL approach to calculate the exchange rate. Results of the study indicated that exchange rate had statistically significant positive impact on the growth, trade, population growth, and oil prices. Moreover, the impact on the economic acceleration was also positive, implying that being the exchange rate strong more were the chances of economic development.