The paper analyses the effects of trade and exchange rate policies on one of Ethiopiaâ€™srnagricultural export item, hides and skins. The problem which motivated this study is therntheoretical debates and empirical contradictions given on the matter of effect ofrndevaluation/depreciation of domestic currency on the performance of export of the country.rnEthiopia, as one of the most endowed in enormous capacity in livestock population, it is arnpotential advantage to the country to be a country with higher competitive advantage in the subrnsector of export of hides and skins. But the reality is the exact opposite. The country at the headrnin livestock population is at the tail of world exporters of hides and skins. one of the policyrnmeasures taken by the government in the last couple of decades in order to improve the level ofrnexport of the country in general is devaluation (and continuous depreciation) of birr. The steprntowards market based determination of exchange rate is intended to give an enhancedrnperformance of exports especially in sectors which the country has great potentials. Therefore,rnthe study asks and answers what happened in the export of hides and skins when the exchangernrate depreciates continuously for the last 17 years. The empirical findings of the study revealrnthat real exchange rate is one factor, among many others, that affects the volume of export ofrnhides and skins. Hence, it is recommended that policy towards liberalized exchange raterndetermination should be complement by other policy measures which are in harmony with therneconomic agenda of export enhancement.