The effect of exchange rate volatility on Kenyan exports to the USA

Abstract

This paper empirically investigates the impact of exchange rate volatility on aggregate Kenyan exportsto the USA. To investigate this relationship the model used is a traditional export demand function where the proxy for exchange rate volatility is moving sample standard deviation of the growth of exchange rates. The regression will be done by Ordinary Least Squares. The paper uses data from 1977 to 2012. The paper finds that there is no significant relationship between exchange rate volatility and aggregate exports to the USA.