## Exchange Rate and Foreign Interest Rate Linkages for Sub-Saharan Africa Floaters

_IMF Working Papers, August 1, 2012_

## Source details

**Canonical URL:** [Exchange Rate and Foreign Interest Rate Linkages for Sub-Saharan Africa Floaters](https://www.imf.org/en/publications/wp/issues/2016/12/31/exchange-rate-and-foreign-interest-rate-linkages-for-sub-saharan-africa-floaters-26202)

## Other formats

- [Markdown version](/en/publications/wp/issues/2016/12/31/exchange-rate-and-foreign-interest-rate-linkages-for-sub-saharan-africa-floaters-26202/index.md)
- [Structured JSON version](/en/publications/wp/issues/2016/12/31/exchange-rate-and-foreign-interest-rate-linkages-for-sub-saharan-africa-floaters-26202/index.json)
- [Bundle manifest](/en/publications/wp/issues/2016/12/31/exchange-rate-and-foreign-interest-rate-linkages-for-sub-saharan-africa-floaters-26202/bundle-manifest.json)

## Bibliographic details
- Authors: Alun H. Thomas
- Published: August 1, 2012
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781475505580.001

---

### Scope and approach
- Considers determinants of exchange rate movements among sub-Saharan countries with flexible exchange rate regimes.
- Determinants are based on the law of one price and interest parity conditions.

### Key findings
- Exchange rates have responded significantly to changes in the US Treasury bill rate.
- Exchange rates have responded significantly to changes in the EMBI spread in recent years.
- The effects of US Treasury bill rate and EMBI spread changes are more important for countries with open capital accounts.
- The paper does not provide any support for the interest rate parity theory because domestic interest rates have no bearing on exchange rate movements.

### Subjects and keywords (as stated in the paper)
- Subjects: Balance of payments, Capital account, Exchange rate adjustments, Exchange rates, Financial institutions, Foreign exchange, Nominal effective exchange rate, Treasury bills and bonds
- Keywords: Africa, Capital account, Change-Robustness check, change-Robustness Checks, determination Dornbusch, EMBI interest rate, exchange rate, Exchange rate adjustments, exchange rate movement, Exchange rates, Interest Parity, Interest Rate, interest rate differential, Nominal effective exchange rate, Sub-Saharan Africa, Treasury bills and bonds, WP

---

## Content in this bundle

- **Wp12208**
  - [Wp12208 (Markdown version)](/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2012/_wp12208.pdf.md){rel="alternate" type="text/markdown"}
  - [Wp12208 (PDF)](/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2012/_wp12208.pdf){rel="external" type="application/pdf"}

---

_Source: https://www.imf.org/en/publications/wp/issues/2016/12/31/exchange-rate-and-foreign-interest-rate-linkages-for-sub-saharan-africa-floaters-26202_