Estimating Equilibrium Exchange Rates for Armenia and Georgia

April 1, 2008

Preview Citation

Format: Chicago

Shuang Ding, and Omar Al Shehabi. Estimating Equilibrium Exchange Rates for Armenia and Georgia, (USA: International Monetary Fund, 2008) accessed December 22, 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

The significant real exchange rate appreciation in Armenia and Georgia since 2003, coupled with persistent current account deficits, raises the question of whether real exchange rates have become overvalued. This paper seeks to identify possible exchange rate misalignment by applying the behavioral equilibrium exchange rate approach, complemented by an analysis of the traditional competitiveness indicators. The results indicate an undervaluation of the Armenian dram and no significant misalignment of the Georgian lari in 2006.

Subject: Current account balance, Exchange rates, Real effective exchange rates, Real exchange rates, Terms of trade

Keywords: Appreciation, Armenia, Georgia, WP

Publication Details

Pages:

21
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2008/110
Stock No:

WPIEA2008110
ISBN:

9781451869705
ISSN:

1018-5941

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