Estimating Egypt’s Equilibrium Real Exchange Rate

Joannes Mongardini

No 1998/005, IMF Working Papers from International Monetary Fund

Abstract: In light of the real appreciation of the Egyptian pound over the last six years and Egypt’s lackluster export growth, questions of external competitiveness and exchange rate policy have arisen. This paper sheds light on these issues by estimating empirically Egypt’s equilibrium real exchange rate, that is, the rate that is consistent with fundamentals. The results show that, while the real exchange rate was substantially overvalued before 1993, today it is only moderately above the equilibrium rate. Moreover, the analysis shows that the recent appreciation of the pound does not indicate a worsening misalignment.

Keywords: WP; U.S. dollar; administered exchange rates; monetary policy; terms of trade; equilibrium exchange rate (search for similar items in EconPapers)
Pages: 41
Date: 1998-01-01
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Citations: View citations in EconPapers (33)

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