An Assessment of External Price Competitiveness for Mozambique

 
Author/Editor: Vitek, Francis
 
Publication Date: August 01, 2009
 
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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
 
Summary: This paper conducts an assessment of external price competitiveness for Mozambique. A variety of indicators suggest that Mozambique has recently lost external price competitiveness with respect to its major trading partners. Consistent with these indicators, an exchange rate assessment indicates that the metical is overvalued by 26 to 41 percent in real effective terms. If sustained, an overvaluation of this magnitude has the potential to retard economic growth and jeopardize external stability, calling for an adjustment of monetary policy to gradually restore external price competitiveness.
 
Series: Working Paper No. 09/165
Subject(s): Competition | Exchange rate assessments | Exchange rates | External sector | Mozambique | Price structures | Real effective exchange rates | Terms of trade

Author's Keyword(s): External price competitiveness | exchange rate assessment | macroeconomic balance approach | equilibrium real exchange rate approach | external sustainability approach
 
English
Publication Date: August 01, 2009
Format: Paper
Stock No: WPIEA2009165 Pages: 20
Price:
US$18.00 (Academic Rate:
US$18.00 )
 
 
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