EXCHANGE-RATE VARIABILITY AND IMPORTS IN WAMU COUNTRIES - IS THIS RELATIONSHIP RELEVANT

In a recent contribution to this journal, Medhora (1990) showed that, for 1976-82, exchange rate variability has had little impact on the West African Monetary Union's (WAMU) imports. We argue that Medhora's findings are largely due to WAMU's trade structure. Indeed, by treating WAMU's trading environment as a likely buffer, sufficient to dampen possible exchange rate risk on trading opportunities, we show that exchange rate variability will not matter in WAMU countries' imports decisions.