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Exchange Rate Assessment for Sub-Saharan Economies


  • Burcu Aydin


This paper provides an exchange rate assessment for sub-Saharan African economies by using methodologies similar to those developed by the International Monetary Fund’s Consultative Group on Exchange Rate Issues. As in the World Economic Outlook (IMF, 2009a), the unbalanced panel dataset covers 182 countries from 1973 to 2014. We apply four methodologies to assess the fundamental exchange rate: macroeconomic balance, equilibrium real exchange rate, external sustainability, and purchasing power parity. Results show that the impact of macroeconomic fundamentals on the equilibrium real exchange rate is different for sub-Saharan African economies than for advanced and less advanced economies.

Suggested Citation

  • Burcu Aydin, 2010. "Exchange Rate Assessment for Sub-Saharan Economies," IMF Working Papers 10/162, International Monetary Fund.
  • Handle: RePEc:imf:imfwpa:10/162

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    References listed on IDEAS

    1. Rudolfs Bems & Irineu E de Carvalho Filho, 2009. "Current Account and Precautionary Savings for Exporters of Exhaustible Resources," IMF Working Papers 09/33, International Monetary Fund.
    2. Joannes Mongardini & Alexander Chudik, 2007. "In Search of Equilibrium; Estimating Equilibrium Real Exchange Rates in Sub-Saharan African Countries," IMF Working Papers 07/90, International Monetary Fund.
    3. Luca Antonio Ricci & Gian Maria Milesi‐Ferretti & Jaewoo Lee, 2013. "Real Exchange Rates and Fundamentals: A Cross‐Country Perspective," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 45(5), pages 845-865, August.
    4. Jaewoo Lee & Jonathan David Ostry & Alessandro Prati & Luca A Ricci & Gian M Milesi-Ferretti, 2008. "Exchange Rate Assessments; CGER Methodologies," IMF Occasional Papers 261, International Monetary Fund.
    5. Jemma Dridi & Maher Hasan, 2008. "The Impact of Oil-Related Income on the Equilibrium Real Exchange Rate in Syria," IMF Working Papers 08/196, International Monetary Fund.
    6. Mark W Lewis & Aurelie Martin & Gabriel Di Bella, 2007. "Assessing Competitiveness and Real Exchange Rate Misalignment in Low-Income Countries," IMF Working Papers 07/201, International Monetary Fund.
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    Cited by:

    1. Cham, Tamsir, 2015. "An Assessment of External Price Competitiveness for The Gambia," Working Papers 1436-8, The Islamic Research and Teaching Institute (IRTI).
    2. Adeniji, Sesan, 2013. "Exchange Rate Volatility and Inflation Upturn in Nigeria: Testing for Vector Error Correction Model," MPRA Paper 52062, University Library of Munich, Germany.
    3. repec:bla:reviec:v:25:y:2017:i:5:p:949-974 is not listed on IDEAS
    4. Cécile Couharde & Issiaka Coulibaly & Olivier Damette, 2011. "Misalignments and Dynamics of Real Exchange Rates in the CFA Franc Zone," EconomiX Working Papers 2011-28, University of Paris Nanterre, EconomiX.
    5. Ojeda Joya, Jair & Torres, Jhon Edwar, 2012. "Posición externa de largo plazo y tipo de cambio real de equilibrio en Colombia," REVISTA LECTURAS DE ECONOMÍA, UNIVERSIDAD DE ANTIOQUIA - CIE, October.
    6. Issiaka Coulibaly, 2014. "Competitiveness and growth within the CFA franc zone: Does the switch to the Euro matter?," International Economics, CEPII research center, issue 139, pages 1-18.
    7. Ibrahim Elbadawi & Eman Refaat, 2015. "Competitive Real Exchange Rates are Good for the Poor: Evidence from Egyptian Household Surveys," Working Papers 966, Economic Research Forum, revised Nov 2015.
    8. Couharde, Cécile & Coulibaly, Issiaka & Damette, Olivier, 2013. "Anchor currency and real exchange rate dynamics in the CFA Franc zone," Economic Modelling, Elsevier, vol. 33(C), pages 722-732.
    9. repec:cii:cepiei:2014-q3-139-1 is not listed on IDEAS
    10. Tamsir Cham, 2016. "An Assessment of External Price Competitiveness for the Gambia," Applied Economics and Finance, Redfame publishing, vol. 3(4), pages 207-216, November.
    11. Blaise Gnimassoun, 2017. "Exchange rate misalignments and the external balance under a pegged currency system," Review of International Economics, Wiley Blackwell, vol. 25(5), pages 949-974, November.
    12. International Monetary Fund, 2013. "Republic of Congo; 2013 Article IV Consultation," IMF Staff Country Reports 13/282, International Monetary Fund.
    13. Coulibaly, Issiaka & Gnimassoun, Blaise, 2013. "Optimality of a monetary union: New evidence from exchange rate misalignments in West Africa," Economic Modelling, Elsevier, vol. 32(C), pages 463-482.
    14. Durevall, Dick, 2011. "East African Community: Pre-conditions for an Effective Monetary Union," Working Papers in Economics 520, University of Gothenburg, Department of Economics.
    15. Juan P Trevino, 2011. "Oil-Price Boom and Real Exchange Rate Appreciation; Is there Dutch Disease in the Cemac?," IMF Working Papers 11/268, International Monetary Fund.

    More about this item


    Africa; Foreign exchange; Prices; Exchange Rate; Panel Data; current account balance; current account; real exchange rate; exchange rates;

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