Estimating Egypt’s Equilibrium Real Exchange Rate

Download or read book Estimating Egypt’s Equilibrium Real Exchange Rate written by Mr.Joannes Mongardini and published by International Monetary Fund. This book was released on 1998-01-01 with total page 42 pages. Available in PDF, EPUB and Kindle. Book excerpt: In light of the real appreciation of the Egyptian pound over the last six years and Egypt’s lackluster export growth, questions of external competitiveness and exchange rate policy have arisen. This paper sheds light on these issues by estimating empirically Egypt’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.