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Author/Editor:
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Iimi, Atsushi
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Publication Date:
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June 01, 2006
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Electronic Access:
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Free Full text
(PDF file size is 434KB).
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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
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Summary:
Botswana's successive currency devaluations and recent move from a fixed to a crawling peg exchange rate regime raise the question of whether the exchange rate might be misaligned with economic fundamentals. This paper, applying the behavioral equilibrium exchange rate (BEER) approach, analyzes the behavior of the real exchange rate for the period 1985-2004. It finds that the pula was undervalued in the later 1980s but overvalued in recent years. Some policy lessons from experiences in other countries with crawling peg arrangements are therefore considered in the context of Botswana.
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Order a print copy
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Series:
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Working Paper No. 06/140
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Subject(s):
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Exchange rates | Botswana | Devaluation | Crawling peg | Exchange rate regimes
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Author's Keyword(s):
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Real effective exchange rates | crawling peg |
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