Exchange Rate Regime Considerations for Jordan and Lebanon

Rina Bhattacharya

No 2003/137, IMF Working Papers from International Monetary Fund

Abstract: This paper addresses the issue of the appropriate exchange rate regimes for Jordan and Lebanon in the context of the literature on optimum currency areas and the arguments concerning the use of the exchange rate as a nominal anchor for the economy. It presents some empirical results on the nature of output shocks in Jordan and Lebanon in the recent past, on the price sensitivity of exports from Jordan, and on currency and asset substitution in both countries. It does not directly address the issue of whether the current exchange rate in either country is overvalued or not, nor does it discuss the issue of an appropriate exit strategy from the current peg.

Keywords: WP; exchange rate; Jordan; Lebanon; exchange rate regime; optimum currency area; nominal anchor; money demand demand shock; trading partner country; rate of return; Lebanese pound; exchange rate peg; case of Jordan; exchange rate instrument; exchange rate depreciation; Jordanian dinar; money demand disturbance; Exchange rate arrangements; Exchange rate flexibility; Conventional peg; Exports; Exchange rates; Middle East (search for similar items in EconPapers)
Pages: 42
Date: 2003-06-01
References: View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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