scholarly journals MOROCCAN DIRHAM FLEXIBILIZATION AND EQUILIBRIUM EXCHANGE RATE: A QUEST FOR GRAIL?

2020 ◽  
Vol 10 (4) ◽  
pp. 132-140
Author(s):  
Nicolas Moumni ◽  
Salma Dasser
Keyword(s):  
Exchange Rate ◽  
Equilibrium Exchange Rate ◽  
Equilibrium Exchange

Estimation of fiscal rule impact on Russian ruble equilibrium exchange rate

2021 ◽  
pp. 70-84
Author(s):  
D. A. Menshikh
Keyword(s):  
Exchange Rate ◽  
Foreign Exchange ◽  
Oil Price ◽  
Real Effective Exchange Rate ◽  
Alternative Methods ◽  
Equilibrium Exchange Rate ◽  
The Real ◽  
Equilibrium Exchange ◽  
Fiscal Rule ◽  
The Impact

This paper describes a new approach that makes it possible to assess the impact of foreign exchange interventions implemented under the fiscal rule on the Russian ruble equilibrium exchange rate. The essence of the approach is to quantify the impact of foreign exchange interventions carried out within the framework of the fiscal rule on the balance of supply and demand of foreign exchange, and to reflect this influence in macroeconomic models using the “effective” oil price indicator. The article describes in detail the calculation of this indicator. The advantage of using the “effective” oil price indicator compared to alternative methods lies in the efficiency (the ability to apply for monthly data), simplicity (the possibility of using for scenario forecasting of the exchange rate), as well as the flexibility of the method (the possibility of taking into account periods of suspension of the fiscal rule and deferred purchases). The current gap in the real effective exchange rate of Russian ruble was calculated based on the data for February 2008 — October 2019. The assessment of the contribution of the fiscal rule to the equilibrium value of the real exchange rate was about 2 pp., at the end of 2019 Russian ruble was overvalued.

The real equilibrium exchange rate in a commodity­exporting economy: the experience of Azerbaijan

2021 ◽  
pp. 25-38
Author(s):  
Vusal Gasimli ◽  
Vusala Jafarova
Keyword(s):  
Exchange Rate ◽  
Real Exchange Rate ◽  
Oil Prices ◽  
Exchange Rate Policy ◽  
Current Account Balance ◽  
Equilibrium Exchange Rate ◽  
Long Run ◽  
Equilibrium Exchange ◽  
Rate Policy ◽  
Relative Productivity

The case of Azerbaijan serves to study the adequacy of exchange-rate policy in a resource-rich economy. This paper analyses the behavior of Azerbaijan’s external accounts over the past twenty years. Declining oil prices made an existing exchange-rate peg unsustainable and led to a large devaluation in 2015. Since then, the current account balance has improved, but by less than expected. We use the EBA-Lite method to derive regression-based estimates of the equilibrium real exchange rate, and relate misalignments to measures of “policy gaps”. Our findings suggest that only a few years after the devaluation, Azerbaijan’s currency has once more become overvalued. Moreover, the equilibrium real exchange rate is volatile and hardly compatible with a long-run exchange rate peg. Exchange rate policy should try to accommodate shifts in the fundamental determinants such as relative productivity and real oil prices.

Properties of the fundamental equilibrium exchange rate in the Treasury model

1999 ◽  
Vol 169 ◽  
pp. 96-104 ◽  
Author(s):  
Keith B. Church
Keyword(s):  
Exchange Rate ◽  
Real Exchange Rate ◽  
Nominal Exchange Rate ◽  
Equilibrium Exchange Rate ◽  
Natural Rate ◽  
The Real ◽  
Long Run ◽  
Equilibrium Exchange ◽  
The Uk ◽  
Fundamental Equilibrium Exchange Rate

This article calculates the equilibrium real exchange rate for the UK economy. The long-run trade and supply side relationships from HM Treasury's model are used to estimate the level of the real exchange rate consistent with the UK economy growing at its ‘natural’ rate while achieving a sustainable current account position. The model shows that the real exchange rate associated with macroeconomic equilibrium lies well below the actual rate for most of the 1990s. This result has important implications for possible UK participation in the single European currency as, once the nominal exchange rate is fixed, overvaluation can only be corrected by holding UK inflation lower than that elsewhere. Achieving this may be costly in terms of jobs and output.

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