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Author/Editor:
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Thomas, Alun H.
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Publication Date:
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August 01, 2012
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Electronic Access:
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Free Full text
(PDF file size is 1,090KB).
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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:
The paper considers the determinants of exchange rate movements among sub-Saharan countries that have flexible exchange rate regimes. The determinants are based on the law of one price and interest parity conditions. Results indicate that the exchange rates have responded significantly to changes in the US Treasury bill rate and to the EMBI spread in recent years. The effects are more important for countries with open capital accounts. On the other hand the paper does not provide any support for the interest rate parity theory because domestic interest rates have no bearing on exchange rate movements.
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Order a print copy
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Series:
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Working Paper No. 12/208
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Subject(s):
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Exchange rates | Flexible exchange rate policy | Floating exchange rates | Interest rates | Sub-Saharan Africa
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Author's Keyword(s):
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Exchange Rate | Interest Rate | Interest Parity |
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