Estimating Egypt's Equilibrium Real Exchange Rate

Estimating Egypt's Equilibrium Real Exchange Rate

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In light of the real appreciation of the Egyptian pound over the last six years and Egypta€™s lackluster export growth, questions of external competitiveness and exchange rate policy have arisen. This paper sheds light on these issues by estimating empirically Egypta€™s equilibrium real exchange rate, that is, the rate that is consistent with fundamentals. The results show that, while the real exchange rate was substantially overvalued before 1993, today it is only moderately above the equilibrium rate. Moreover, the analysis shows that the recent appreciation of the pound does not indicate a worsening misalignment.EQUILIBRIUM. REAL. EXCHANGE. RATE. 16. The simple analysis of the time series of the real effective exchange rate in the previous ... means to evaluate movements in Egypta#39;s REER and give a quantitative answer to the policy issue of overvaluation outlined in section II. ... 18. There is a relatively large theoretical and empirical literature The Equilibrium Real Exchange rate A A Summary of the Literature.

Title:Estimating Egypt's Equilibrium Real Exchange Rate
Author:Mr. Joannes Mongardini
Publisher:International Monetary Fund - 1998-01-01


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