Algeria: The Real Exchange Rate, Export Diversification, and Trade Protection

Piritta Sorsa

No 1999/049, IMF Working Papers from International Monetary Fund

Abstract: Given the tendency of the oil sector to appreciate the equilibrium real exchange rate (RER) in Algeria, trade liberalization with its depreciating impact on the RER is important for diversification of exports. This paper shows that reduction in trade protection would depreciate the RER in Algeria, which in turn would improve competitiveness of, and incentives to invest in, non-oil exports. The paper then discusses existing levels of protection in Algeria and directions for reform.

Keywords: WP; trade liberalization; anti-export bias; oil price; export development; Protection; growth; protection level; trade openness; hydrocarbon export; trade policy restrictiveness; trade policy variable; Real exchange rates; Exports; Trade policy; Oil prices; Tariffs; North Africa; Eastern Europe (search for similar items in EconPapers)
Pages: 24
Date: 1999-04-01
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Citations: View citations in EconPapers (7)

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