Abstract:
This study intended to assess the effect of the exchange rate on international trade in
Tanzania. Specific objectives of this study were: to examine the effect of the exchange rate,
manufacturing value-added, industry value-added, inflation, and agricultural growth on
international trade (import and export trade) in Tanzania, to assess the relevance of exchange
rate in predicting the international trade in Tanzania and to examine whether the exchange
rate is significant to explain about the international trade or not. A causal research design
was employed in this research. Secondary data was used in this study which covered a period
of 25 years from 1995 to 2020. Data were analysed using descriptive and inferential analysis
with aid of STATA. Findings of this study uncovered that exchange rate, manufacturing valueadded,
industry value added negatively, inflation affects the international trade in Tanzania.
The study recommends that policymakers should establish coherent policies that will lead to
a stable exchange rate system under which stability of the real exchange rate will be achieved
and maintained to boost the country’s overall international trade and economic growth in
Tanzania.
