The Impact of Exchange Rates on the Libyan Trade Balance during 2013–2024: An Econometric Analysis Using Simple Linear Regression

Abstract

This study aims to analyze and measure the impact of exchange rates on the trade balance of Libya during the period (2013-2024), with a total of 12 observations. The econometric approach was used by applying the simple linear regression model to measure the two variables (independent variable: exchange rate, dependent variable: trade balance).

The study found a positive relationship with statistical significance, where the correlation coefficient (R = 0.677) and the coefficient of determination (R² = 0.459) indicate that approximately 45% of the changes affecting the trade balance can be explained by changes in the exchange rate. The F and T values were also statistically significant at a level of (0.05).

This study focused on the direct relationship between exchange rates and the trade balance without including control variables such as oil prices, GDP, exports, and imports, highlighting the importance of adopting economic policies that contribute to achieving exchange rate stability, which positively impacts economic performance.