Does the Exchange Rate Matter on Import -Export in Cote D’Ivoire?

This article examines exchange rate matter on exports and imports activities in Cote d’Ivoire and analyze the link between CFA Franc zones (West African Economic Monetary Union (WAEMU), consisting of 8 West African countries with French Treasury. Study used recent annually data from 1995- 2017. Vector Auto Regression (VAR) consisting on imports, export and Exchange rate is considered to check the impact of exchange rate on exports and imports in cote d’Ivoire. Augmented Dicker Fuller (ADF) test is used to test the stationary of the variables. Lag selection criterion (AIC) advised us to take two lags in VAR Model to be optimum. The VAR model result shows that exchange rate are positive and insignificant on exports at both lags EX(-1) and EX(-2). However The impact of exchange rate on import shows different at 2 lags; At first lags, exchange rate EX(-1) is positive and insignificant but negative and insignificant at second lags EX(-2).Our findings shows that exchange rate does not matter exports and imports activities in Cote d’Ivoire since the t-statistic regarding the exchange rate is less than 2 at both lags Ex(-1) and Ex(-2) for exports and imports.