Estimating Egypt’s Equilibrium Real Exchange Rate

January 1, 1998

Preview Citation

Format: Chicago

Joannes Mongardini. Estimating Egypt’s Equilibrium Real Exchange Rate, (USA: International Monetary Fund, 1998) accessed December 26, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

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.

Subject: Current account, Exchange rate arrangements, Exchange rates, Real effective exchange rates, Real exchange rates

Keywords: Administered exchange rates, Equilibrium exchange rate, Monetary policy, Terms of trade, U.S. dollar, WP

Publication Details

Pages:

41
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 1998/005
Stock No:

WPIEA0051998
ISBN:

9781451842159
ISSN:

1018-5941

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