The Patterns of Non-oil Exports of the Country Affected by Exchange Rate Fluctuation

The effective rate of exchange is one of the most important factors in international competitiveness. The more it increases, the better the competitiveness of exports is. So, keeping or raising the real effective exchange rate has a positive effect on the country's trade balance, but reducing it will have a negative effect. The aim of this study is to investigate the effect of exchange rate on the non-oil exports of Iran with the time series analysis approach. The data on the variables were extracted from databases for the period of 1991-2012, and the Dickey-Fuller test was used to evaluate the reliability of the variables. Also, the Granger causality test and the VAR model were used to test the hypothesis. The results showed that the variable of exchange rates had significant adverse effects on non-oil exports during the studied period; with an increase in the exchange rate in that period, non-oil exports declined. It was also shown that the impacts of GDP, the degree of economic openness and non-oil export facilities granted to the private sector were positive.