A Survey of Direct and Indirect Effects of Exchange Rate Fluctuations on Non-Oil Exports

The present paper investigates the effects of exchange rate fluctuations on non-oil exports. Production and inflation are two effective variables on non– oil exports, which are affected by exchange rate. Therefore, the effects of exchange rate fluctuations on production and inflation as well as its indirect effect on non- oil products have been studied. The results revealed that although a direct rise in exchange rate increases non – oil products, the indirect effects caused by it due to an increase in inflation and a decrease in production give rise to a reduction in non- oil production .
The results Further revealed that all in all the negative indirect effect of exchange rate fluctuations on non- oil exports through its effect on inflation and production and the effect of These two variables ( inflation and production ) on non – oil exports is larger than the positive effect of an increase in exchange rate on non – oil exports.