Exchange rate uncertainty and Egyptian exports of horticultural commodities into the EU

What is it about?

This paper investigates the impact of exchange rate volatility on Egyptian exports of fresh fruit and vegetables (FFVs) to their major importing markets in the EU. Using quarterly data covering the period 1994-2016, we examine the determinants of Egypt's exports of FFVs to the EU, and then derive the long-term effects of exchange rate volatility on the FFV exports. The empirical results show that exchange rate volatility has a long-run significant effect on Egypt's FFV exports to the EU. Overall, the findings highlight the importance of exchange rate volatility in understanding the behavior of Egyptian exports of FFVs to the EU. Thus, the design and implementation of exchange rate policies and export promotion programs in Egypt should take into consideration the stability and level of the real exchange rate.

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