The book examined empirically the effect of exchange rate risk on international trade at various level of disaggregation. The book consists of ten chapters. Chapter 1 presented introduction about the issue of exchange rate risk & trade, brief survey of relevant literature, specific objectives & organization of the study. Chapter 2 estimated the exchange rate risk & checks robustness of the estimated series. Chapter 3 offered the univariate properties of the variables involved & specified the functional form of the model. Chapter 4–7 estimated the effect of exchange rate risk along with other factors on aggregate & bilateral export/import demand for Pakistan with her major trading partners respectively in the long & short run. Chapter 8 conducted same analysis for Pakistan’s bilateral sectoral-exports. Chapter 9 summarized the dynamic interactions of exports/imports demands at various levels, with exchange rate risk & other macroeconomic variables concerned. Chapter 10 presented the summary of results, policy implications, limitations of the study & avenue for further research. This study is useful for academic students as well as policy makers for external sector development.