Does the Exchange Rate and Its Volatility Matter for International Trade in Ethiopia?

This study was carried out to investigate the impact of Ethiopian exchange rate and its volatility on international trade. Trade openness used as a proxy for trade in study. The study’s general objective how responds levels volatility. relied solely secondary time-series data spanning years 1992 2019. Autoregressive Distributive Lag (ARDL) model long-term relationship between level, volatility, performance. An error correction estimate variables short term. To conduct regression analysis, Foreign Direct Investment (FDI), Gross Domestic Product (GDP), inflation were control variables. finding implies that: term, level found negatively significantly influence However, positively affects both long In addition, gross domestic product, foreign direct investment, have positive effect term lends support J-curve effects, which suggest an initial loss followed by dramatic gain findings this that there is no significant from justify currency depreciation Ethiopia.