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Exchange Rate Assessment for Oil Exporters

Author

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  • Mr. Klaus-Stefan Enders

Abstract

While the underlying methodologies continue to be widely debated and refined, there is little consensus on how to assess the equilibrium exchange rate of economies dominated by production of finite natural resources such as the oil economies of the Middle East. In part this is due to the importance of intertemporal aspects (as the real exchange rate may affect the optimal/equitable rate of transformation of finite resource wealth into financial assets), as well as risk considerations given the relatively high volatility of commodity prices. The paper illustrates some important peculiarities of the exchange rate assessment for such natural resource producers by working through a simple two-period model that captures certain key aspects of many resource economies.

Suggested Citation

  • Mr. Klaus-Stefan Enders, 2009. "Exchange Rate Assessment for Oil Exporters," IMF Working Papers 2009/081, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2009/081
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    References listed on IDEAS

    as
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    3. repec:imf:imfops:2008/002 is not listed on IDEAS
    4. Mr. Jemma Dridi & Maher Hasan, 2008. "The Impact of Oil-Related Income on the Equilibrium Real Exchange Rate in Syria," IMF Working Papers 2008/196, International Monetary Fund.
    5. Bems, Rudolfs & de Carvalho Filho, Irineu, 2011. "The current account and precautionary savings for exporters of exhaustible resources," Journal of International Economics, Elsevier, vol. 84(1), pages 48-64, May.
    6. 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.
    7. Mr. Joannes Mongardini & Mr. Alexander Chudik, 2007. "In Search of Equilibrium: Estimating Equilibrium Real Exchange Rates in Sub-Saharan African Countries," IMF Working Papers 2007/090, International Monetary Fund.
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    Cited by:

    1. Mouhamadou Sy & Hamidreza Tabarraei, 2010. "Capital inflows and exchange rate in LDCs: The Dutch disease problem revisited," PSE Working Papers halshs-00574955, HAL.
    2. Mouhamadou Sy & Hamidreza Tabarraei, 2010. "Capital inflows and exchange rate in LDCs: The Dutch disease problem revisited," Working Papers halshs-00574955, HAL.
    3. Mr. Bassem M Kamar & Jean-Etienne Carlotti & Mr. Russell C Krueger, 2009. "Establishing Conversion Values for New Currency Unions: Method and Application to the planned Gulf Cooperation Council (GCC) Currency Union," IMF Working Papers 2009/184, International Monetary Fund.

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