This paper analyzes the effects ofexchange policies on Iran,s foreign
trade, by applying new econometric techniques. In assessing the impacts of
depreciation of the national currency on macroeconomic variable, the real
rather than nominal exchange rate has been determined to be more
appropriate criterion to demonstrate the success or failure ofthe adopted
During the period under the study, trade balance improvements and its
sustainity are contingent on the persistent appreciation of the real exchange
rate (depreciation ofthe real value ofthe national currency) during the
various periods oftime. Notably, the consistency between monetary and
financial policies from one hand and exchange policies from the other hand
is a necessary condition for maintaining such appreciation.
The results of this study reveal that the lags of money stock ank import
variables will significantly explaine the change in the non-oil exports.
Furthermore, production variable, in the relevant equation, is influenced
only by its own lags. This means that, during the period under the
consideration, the monetary and exchange policies have not played an
important role in fluctuations of the production. Ultimately, within import
equation, the import will megerly be influenced by exchange rate lags. This
phenomenon can be explained by the fact during the period under the study,
import restriction, as a dominant variable, has played a key role in import
changes in Iran.
Overall, the results from the study on non-oil export,import and
production denote that exchange policies and exchange rate ,movements do
not play such an important role in changes of these variables