Increase in the Exchange Rate and Its Effect on Export and Import

Background: Unprecedented increase in the exchange rate, especially in the last two recent years has, directly or indirectly, many effects on the economy. Objective: The objective of this paper is that what's the effect of this increase in the exchange rate on export and the most important is a country's import trade flows which are the most important trade flows in the country. Results: First, after introduction and key words, we review research literature and related definitions such as the definition of exchange and its types, the exchange rates, inflation rate and balance of payments. In finding analysis section, by using the data documented in the exchange rate over the past 35 years and exchange rate statistics over the last few years and also the statistics of export and import, examine these statistics specifically in the years 1390 and 2012 which was the culmination of exchange-rate volatility, and we find the relationship between exchange rates and amounts of export and import. Conclusion: We conclude mainly based on official figures released by the Central Bank of the Islamic Republic of Iran that an increase in the exchange rate reduces imports and increase exports, temporarily. Finally, this paper ends by providing conclusions and future works and resources and references.

Exchange Rate, Economy Export and Import