Abstract
The underlying objective of this study is to examine volatility found during the implementation time period of three exchange rate policies (fixed, managed floating and floating) in Pakistan and its relationship with the exports of the country. It examines the exports variability during the time periods of these exchange rate policies. The volatility in exchange rate has been calculated by employing GARCH models. Quarterly data has been used in the study and it spans from 1972:1 to 2013:4. The dataset has been obtained from International Financial Statistics released by IMF. Results reveal that floating exchange rate regime (2000:2 -2013:4) has shown higher exchange rate volatility. However, variability in real export has been found during the fixed (pegged) exchange rate regime. The correlation results show that these two variables are negatively associated with each during all three exchange rate regimes time periods.
Keyword(s)
Exchange rate, Volatility, exports, Implementation, associated