The Effect of Exchange Rates on Trade Balance: An Empirical Study of Morocco

Abstract

Objective – This paper aims to examine the relationship between exchange rates and trade balance in Morocco, to investigate whether the Marshall-Lerner condition and J-curve exist.

Methodology/Technique – This paper attempts to identify the relationship between the real exchange rate and trade balance in Morocco between 2000 to 2015.

Findings – Historically, exchange rates have had a strong impact on foreign trade in Morocco.

Novelty – This study concludes that the fluctuation of exchange rates has no notable impact on the rate of foreign trade.

Type of Paper: Empirical.

Keywords: Exchange Rates; Trade Balance; Exports; Imports; Morocco

JEL Classification: D51; D59