Empirical assessment of influence of changes of private real effective exchange rate (REER) of Ukrainian hryvna (UAH) on export and import flows in the context of types of economic activity (TEAs)

The article substantiates a necessity of analysis of influence of the exchange rate dynamics on volumes of export and import operations through the use of not aggregated but private (individual) indices of REER of UAH, built for individual goods and types of economic activity. Assessment of private REER of UAH by export and import baskets for the period from 2003 till 2011 allowed making a conclusion that strengthening of UAH before crisis had different influence on exporters and producers of products for the domestic market. Analysis of private indices of REER of UAH for individual TEAs of industry revealed that, as of the end of 2011, the products of both extractive industry and processing industry preserved the reserve of price competitiveness with respect to the year 2003. Reduction of REER in 2009 from 109.7 down to 93.3 showed that devaluation of UAH in the end of 2008 made 47.9% of Ukrainian products competitive if compared with pre-crisis 26.2% in the structure of export of goods. The article shows results of assessment of exchange rate elasticity of export of products of individual industrial TEAs, received in the result of realisation of econometric models of assessment of influence of UAH exchange rate changes upon volumes of export during the 2003-2011 period. Changes in the structure of import by directions, shown on the basis of analysis of data of expenses-production tables of Ukraine in main prices, helped to confirm factual dependence on import factors of production of some of the products that go to the domestic market. The conducted detailed analysis of exchange rate effects on different sectors of economy allowed allocation of TEAs groups, which are potentially interested in strengthening UAH and those that can obtain profit from devaluation. The article provides results of econometric modelling of influence of changes of private REER on volumes of import of products of individual TEAs groups, which gives an assessment of exchange rate elasticity of import. The article makes model calculations and shows that exchange rate effects significantly depend on participation of a branch in international competition, its orientation on foreign or domestic market, and scale of use of imported raw materials and components.