## Exchange Rate Regime Considerations for Jordan and Lebanon

_IMF Working Papers, June 1, 2003_

## Source details

**Canonical URL:** [Exchange Rate Regime Considerations for Jordan and Lebanon](https://www.imf.org/en/publications/wp/issues/2016/12/30/exchange-rate-regime-considerations-for-jordan-and-lebanon-16568)

## Other formats

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## Bibliographic details
- Authors: Rina Bhattacharya
- Published: June 1, 2003
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451855937.001

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### Summary
- Addresses appropriate exchange rate regimes for Jordan and Lebanon within the literature on optimum currency areas and the use of the exchange rate as a nominal anchor.
- Presents empirical results on:
  - the nature of output shocks in Jordan and Lebanon in the recent past,
  - the price sensitivity of exports from Jordan,
  - currency and asset substitution in both countries.
- Explicit exclusions:
  - Does not address whether the current exchange rate in either country is overvalued or not.
  - Does not discuss an appropriate exit strategy from the current peg.

### Empirical analysis and findings (as presented)
- Nature of output shocks:
  - Empirical results are presented on the types and properties of output shocks affecting Jordan and Lebanon in the recent past.
- Price sensitivity of Jordanian exports:
  - Empirical results are presented on the price sensitivity of exports from Jordan.
- Currency and asset substitution:
  - Empirical results are presented on currency and asset substitution in both Jordan and Lebanon.

### Theoretical and policy context
- Frameworks and concepts used:
  - Optimum currency areas.
  - Exchange rate as a nominal anchor for the economy.
- Policy questions considered:
  - Appropriate exchange rate arrangements and flexibility for Jordan and Lebanon.
  - Implications of empirical findings for exchange rate regime choice.
- Policy questions explicitly not covered:
  - Overvaluation status of current exchange rates.
  - Exit strategies from existing pegs.

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## Content in this bundle

- **Exchange Rate Regime considerations for Jordan and Lebanon - WP/03/137**
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  - [Exchange Rate Regime considerations for Jordan and Lebanon - WP/03/137 (PDF)](/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2003/_wp03137.pdf){rel="external" type="application/pdf"}

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_Source: https://www.imf.org/en/publications/wp/issues/2016/12/30/exchange-rate-regime-considerations-for-jordan-and-lebanon-16568_