Impact of the Foreign Exchange Rate on balance of trade in Jordan for the period (2000-2019): An ARDL Approach

Abstract

This study aimed to show the impact of the foreign exchange rate on the Jordanian trade balance during the period (2000-2019) by showing the impact of both (real US dollar exchange rate, nominal exchange rate of the pound sterling, nominal euro exchange rate) on the Jordanian trade balance, and both the descriptive and analytical approach was used using the method of ARDL. The results of the Augmented – Dickey Fuller Test (ADF) showed the stationary the study variables at the first difference, and the Johansen Co-integration Test and the Bounds Test for co-integration showed a long-term co-integrative relationship between the study variables. The results of the study also showed a statistically significant positive effect of (real US dollar exchange rate, nominal exchange rate of the pound sterling, nominal euro exchange rate) on the Jordanian trade balance.