The Impact of Exchange Rate on Food Sector in Pakistan

Abstract

Using the ARDL, this study examines how Pakistani exchange rate has been affected by the food sector from 1995 to 2021. Food inflation is the dependent variable while exchange rate, fossil fuel, trade, supply money, agriculture price, foreign aid are independent variables. Important insight has been revealed by using a variety of statistical techniques such as, unit-root test, error correction models, LM test, heteroskedasticity and ARDL (short run and long run) tests. This study main findings are exchange rate and food sector has a positive relationship with GDP per capita and economic growth. The relationship study conclusion is that spending on exchange rate and food sector had an indirect and direct impact in economic growth. The research gives decision- makers concrete proof that higher exchange rate and food sector spending boosts a nation’s economic growth.