MANAGING EFFECTS OF FOREX RATE, DISCOUNT RATE & GDP ON EXPORT PERFORMANCE OF PAKISTAN

Abstract

This study examines the effects of shifts in variables of macroeconomics like GDP, the Discount rate, & the Forex rate on Pakistan's export performance. It has been commonly accepted that the Earth has turned into worldwide community because none of the nation can satisfy their wants for merchandises & services. Because of lack of raw materials, these nations are compelled to export merchandises & services that would enable them to earn a sizable amount of foreign exchange, which they then use to pay for goods and services they import that are extremely expensive to produce domestically. Importing is essential to international trade as They make it possible for countries to purchase raw materials from other nations, turn them into finished goods, and then export those goods for a healthy profit. The government must keep its importing & exporting in an appropriate equilibrium in order to keep its balance of payments positive. Only supplies should be brought into our country owing to the fact importing extravagance merchandises would involve reimbursing huge amounts of Forex for merchandises as well as services from overseas. Descriptive statistics and diagnostic tests, comprising the Unit root test, ARDL tests, Bound test, Multicollinearity, Heteroscedasticity, Correlation, & Autocorrelation, have been executed utilizing the figures of independent variables, such as Gross Domestic Product, discount rate,& Forex rate, besides  reliant variables, exporting spread over a period from 1978 to 2023. Cointegration has been implemented by us using the Bounds analysis method, which was created inside the ARDL framework, to examine the likelihood of a long-term balance link among exporting, GDP, discount rate, as well as Forex rate. The results provide convincing evidence that the GDP, discount rate, & Forex rate all considerably effect how our nation's export performance are affected immediately & over time.

Keywords: Importing Exporting, Gdp, Discount Rate, Forex Rate