The Relationship Between the Exchange Rate and the Balance of Payments Using Nonlinear Autoregressive Lag Approach

Abstract

The study aimed to identify the impact and direction of the relationship between the exchange rate and the balance of payments and its behavior in Sudan during period 2000-2023 ,the study used a descriptive –analytical approach to define the theoretical formwork ,it also used a quantitative approach to construct a standard model to measure the nonlinear relationship between the exchange rate and the balance of payments. The study results indicate the existence of a long – term equilibrium relationship for positive and negative , on the balance of payments. This is consistent with the principle of economic theory. Of elasticity, an increase in the exchange rate (devaluation of the currency) leads to an improvement in the competitiveness of domestic production ,an increase in export and a decrease in import ,thus improving the balance of payments