DOES EXCHANGE RATE VOLATILITY HINDER EXPORT PERFORMANCE? AN ECONOMETRIC ANALYSIS WITH EVIDENCE FROM UZBEKISTAN

This study examines the impact of exchange rate volatility on the export performance of Uzbekistan using panel data covering 12 trading sectors over the period 2005–2023. Employing an Ordinary Least Squares (OLS) regression model augmented by Fixed Effects estimation, Johansen cointegration testing, and Granger causality analysis, the results confirm a statistically significant negative relationship between exchange rate volatility — measured by the standard deviation of the monthly nominal effective exchange rate (NEER) — and real export volumes. A one-unit increase in exchange rate volatility reduces real annual exports by approximately USD 47.3 million on average, with the adverse effect being 2.8 times larger for small and medium-sized enterprises (SMEs) than for large exporting firms. The paper concludes with evidence-based policy recommendations aimed at stabilising the external trade environment and enhancing export competitiveness.