A survey on the Effect of Uncertainty Exchange Rate on Growth of Economic Sectors in Iran

Volatility in currency exchange rate and the resulting uncertainty is one of the major variables in macroeconomics that affects different economic sectors in various aspects. Since these fluctuations and the resulting uncertainty does not affect all economic sectors in a similar way, this study aims to investigate the effect of uncertainty in the actual currency exchange rate on development of economic sectors in Iran using combined data over the period between 1991 and 2011 through panel method. The results obtained from this study indicate that uncertainty in the exchange rate leaves negative and significant effects on development of economic sectors. This effect was higher in industry, mining, transportation and communication, hotels and restaurants, and construction sector with -0.51, -0.40, -0.24, and -0.23 respectively.