ملخص
This research aimed to analyze the nature of the relationship between the exchange rate of the Libyan Dinar against the US Dollar (LNEXR) and trade openness (LNT_OB) in Libya during the period (1972-2022) using an Augmented ARDL model. The results indicated the existence of a positive long-run equilibrium relationship between the exchange rate and trade openness; a 1% increase in the exchange rate of the Libyan Dinar against the US Dollar (LNEXR) leads to an approximate 0.59% increase in trade openness. The Error Correction Term (ECT) coefficient was -37, any approximately 37% of short-run disequilibria being corrected to return to a long-run equilibrium within approximately two years and eight months. However, these results contradicted with many previous studies in terms of the type of relationship between the study variables, as it was direct and not inverse. This confirms that there is a specificity to the Libyan economy and that there are other factors such as economic policies (monetary and fiscal), market conditions, the type of financial and trade flows, and the balance between exports and imports that can have a significant impact on the relationship between the exchange rate and trade openness in Libya. Accordingly, the researchers recommended the need to focus on adopting a more stable monetary policy aimed at reducing sharp fluctuations in the exchange rate of the Libyan dinar, as well as working on developing integrated trade and economic policies that link exchange rate management with foreign trade policies, in order to achieve balance in the trade balance and reduce the negative effects of external shocks. Keywords: Exchange Rate, Trade Openness, An Augmented ARDL Model