EXCHANGE RATE FLUCTUATIONS AND THEIR IMPACT ON AGRICULTURAL EXPORT GROWTH AND MANAGEMENT IN UZBEKISTAN

Across many developing economies, exports of agricultural produce account for a significant portion of foreign exchange earnings and economic growth, making export competitiveness important for overall economic growth. Hence, the impact of exchange rate dynamics on export competitiveness is even more pronounced. This research examines how exchange rate fluctuations affect the growth of agricultural exports in Uzbekistan. Out of all the formerly Soviet Republics, Uzbekistan is the one that has undergone the most rapid exchange rate liberalization and structural reforms since 2017. An ARIMAX model is used in this research to analyze the impact of exchange rate fluctuations on agricultural exports and the efficacy of export forecasting for agricultural exports. This research uses data from the years 2015 to 2024 and relies on monthly observations. Before estimating the ARIMAX model, several unit root tests were conducted to check for the stationarity of the time series data, the ADFA augmented Dickey-Fuller test, KPSS (Kwiatkowski-Phillips-Schmidt-Shin) and Phillips-Perron test. The ARIMAX model used in this case captures the time varying behavior of export and allows for the inclusion of exchange rate fluctuations as an external determinant of agricultural export growth. This analysis attempts to ascertain the nature and scale of the relationship between exports and exchange rates and assess the usefulness of exchange rate data in formulating forecasts for agricultural exports. The research adds more granular evidence from Uzbekistan to the emerging body of literature on the economics of exchange rates and agricultural trade. Evidence for Uzbekistan is especially important given the dearth of empirical studies from this region. The findings of this research suggest important implications for the management of exchange rates, export promotion, and investments in the agricultural sector. This research has identified the role of fluctuations in exchange rates in boosting agricultural exports. This insight is useful for policymakers who are concerned with the competitiveness of agricultural exports and foreign exchange earnings. The findings are timely considering today’s market environment and emerging trends in globalization and integrated markets.