Zimbabwe: Recent Economic Developments, Selected Issues, and Statistical Appendix
January 11, 2001
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The combination of wavering domestic policies, governance problems, and costly deployment of troops to support the Democratic Republic of Congo government has seriously affected economic performance and investor confidence. Exchange rate policy continues to be a key issue in Zimbabwe. This paper conducted an empirical analysis of the determinants of the equilibrium real exchange rate (ERER) for Zimbabwe. The results show that the overvaluation in Zimbabwe is sensitive to lax fiscal policy, suggesting that devaluation needs to be underpinned by a tightening of fiscal policy.
Subject: Banking, Currencies, Exchange rates, External position, Foreign assets, Foreign exchange, Money, Real exchange rates, Tariffs, Taxes
Keywords: Africa, appreciating equilibrium real exchange rate, base period, CR, Currencies, currency overvaluation, equilibrium ERER, ERER, ERER analysis, ERER equation, exchange rate, Exchange rates, Foreign assets, ISCR, model Based, modeling framework, Real exchange rates, Southern Africa, Tariffs, Zimbabwe, Zimbabwe dollar, Zimbabwe's equilibrium real exchange rate
Pages:
84
Volume:
2001
DOI:
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Issue:
013
Series:
Country Report No. 2001/013
Stock No:
1ZWEEA0022001
ISBN:
9781451841466
ISSN:
1934-7685
