The Influence Of Exchange Rate Fluctuations On Export And Import Of The Country

Exchange rate is an important topic in the history of international economics and finance.Exchange rate has a significant impact on foreign trade of the country,as it largely depends on the competitiveness of its goods on world markets.This study focuses on an analysis of the impact of exchange rate fluctuations on Russian and Chinese export and import.We did a comparative analysis,examined the formation of the critical factors,and then made optimization recommendations.Research content includes:First,we analyzed the theory of the impact of exchange rate on international trade and made a comparative analysis of exchange rate policy of Russia and China.Secondly,according to classic theory of exchange rate effect,we proposed research hypotheses of the impact of the Ruble and Renminbi exchange rate fluctuations on Russian and Chinese export and import.Third,using monthly data from 2005 to 2016,we measured the long run effect of exchange rate volatility on export and import by testing for cointegration applying Johansen cointegration method.As for the short run effect,it is examined by VECM Granger causality test.Empirical results show that there is no influence of ruble exchange rate fluctuations on export and import in the long period,but it has an impact on export and import in the short run.As for China,fluctuations of RMB exchange rate have no influence on import neither in the long run nor in the short one,but it influences export in the long period.Finally,based on the empirical results,theoretical statements on the impact of the exchange rate on the dynamics of export and import were refined and description and comparison of the statistical data of Russian and Chinese export and import were held.Moreover,we proposed measures for exchange rate adjustment to promote the international trade of the country.