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Equilibrium exchange rate and misalignment In selected MENA countries

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  • Achy, Lahcen

Abstract

The purpose of this paper is to estimate the equilibrium real exchange rate and derive the degree of misalignment for five MENA currencies: the Algerian Dinar, the Moroccan Dirham, the Egyptian Pound, the Tunisian Dinar and the Turkish lira. Exchange rate policy represents a key tool in macro-economic management and dominates the public policy debate today. How to assess whether exchange rate is undervalued or overvalued with respect to its equilibrium value is clearly at the heart of this debate. An extensive analysis of the degree of misalignment of the five currencies is undertaken on the basis of detailed country specific data. Overall, our results pick up almost perfectly the exchange rate policy episodes in the five countries.

Suggested Citation

  • Achy, Lahcen, 2001. "Equilibrium exchange rate and misalignment In selected MENA countries," MPRA Paper 4799, University Library of Munich, Germany, revised 2001.
    • Handle: RePEc:pra:mprapa:4799
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    References listed on IDEAS

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    Cited by:

    1. Marie-Ange VEGANZONES-VAROUDAKIS & NABLI, 2002. "Exchange Rate Regime and Competitiveness of Manufactured Exports: The case of MENA Countries," Working Papers 200230, CERDI.
    2. Omotosho, Babatunde S. & Wambai, Murjanatu, 2012. "Is the Naira-US Dollar Real Exchange Rate Misaligned?," MPRA Paper 98354, University Library of Munich, Germany.
    3. Khalid, Waqar & Civcir, Irfan & Özdeşer, Hüseyin & Iqbal, Javed, 2023. "The asymmetric impact of real exchange rate misalignment on growth dynamics in Turkey," Journal of Policy Modeling, Elsevier, vol. 45(6), pages 1184-1203.
    4. Alper, Ahmet Murat & Civcir, İrfan, 2012. "Can overvaluation prelude to crisis and harm growth in Turkey," Journal of Policy Modeling, Elsevier, vol. 34(1), pages 112-131.
    5. Bouoiyour, Jamal & Rey, Serge, 2005. "Régime de change, taux de change réel, flux commerciaux et investissements directs étrangers: le cas du Maroc [Real exchange rate, trade flows and foreign direct investments: the Moroccan case]," MPRA Paper 49503, University Library of Munich, Germany.
    6. Lahcen ACHY & Juliette Milgram, 2005. "Does a free trade area favors an optimum currency area? The Case of Morocco and the European Union," International Trade 0512012, University Library of Munich, Germany.

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    More about this item

    Keywords

    Exchange rate; Misalignment; Equilibrium exchange rate;
    All these keywords.

    JEL classification:

    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics

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