Algeria: The Real Exchange Rate, Export Diversification, and Trade Protection

April 1, 1999

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

Given the tendency of the oil sector to appreciate the equilibrium real exchange rate (RER) in Algeria, trade liberalization with its depreciating impact on the RER is important for diversification of exports. This paper shows that reduction in trade protection would depreciate the RER in Algeria, which in turn would improve competitiveness of, and incentives to invest in, non-oil exports. The paper then discusses existing levels of protection in Algeria and directions for reform.

Subject: Exports, Foreign exchange, International trade, Oil prices, Prices, Real exchange rates, Tariffs, Taxes, Trade policy

Keywords: anti-export bias, Eastern Europe, export development, Exports, growth, hydrocarbon export, North Africa, oil price, Oil prices, Protection, protection level, Real exchange rates, Tariffs, trade liberalization, trade openness, Trade policy, trade policy restrictiveness, trade policy variable, WP

Pages:
24
Volume:
1999
DOI:
https://doi.org/10.5089/9781451846829.001
Issue:
049
Series:
Working Paper No. 1999/049
Stock No:
WPIEA0491999
ISBN:
9781451846829
ISSN:
1018-5941

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