Exchange Rate Assessments: Methodologies for Oil Exporting Countries

By Irineu E de Carvalho Filho, Rudolfs Bems

December 1, 2009

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Format: Chicago

Irineu E de Carvalho Filho, and Rudolfs Bems. Exchange Rate Assessments: Methodologies for Oil Exporting Countries, (USA: International Monetary Fund, 2009) accessed November 21, 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

Are the current account fluctuations in oil-exporting countries "excessive"? How should their real exchange rate respond to the evolution of external (and domestic) fundamentals? This paper proposes methodologies tailored to the specific features of oil-exporting countries that help address these questions. Price-based methodologies (based on the time series of real effective exchange rates) identify a strong link between the real exchange rate and the terms of trade, but have relatively limited explanatory power. On the other hand, an empirical model of the current account, which fits oil exporting countries' data well, and an intertemporal model that takes into account the stock of oil reserves provide useful benchmarks for oil exporters' external balances.

Subject: Current account, Current account balance, Oil, Personal income, Real exchange rates

Keywords: Growth rate, Oil exporter, Oil-exporting country, Terms of trade, WP

Publication Details

Pages:

35
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2009/281
Stock No:

WPIEA2009281
ISBN:

9781451874266
ISSN:

1018-5941

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