The Real Exchange Rate and External Competitiveness in Egypt, Morocco and Tunisia

Brixiová, Zuzana; Égert, Balázs; Amor, Thouraya Hadj

doi:10.2139/ssrn.2399598

Cited by 4 publications

(3 citation statements)

References 22 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…Most of the studies on the effect of the exchange rate on exports in Egypt use aggregate-or sectorallevel data. Brixiova et al (2014) show that the real exchange rate misalignment contributed to the weak export competitiveness, as the REER of Egypt was overvalued between the mid-1990s and the late 2000s. They find that structural factors are key to boosting exports, together with avoiding sizeable future misalignments.…”

Section: Exports and Exchange Ratementioning

confidence: 99%

From Currency Depreciation to Trade Reform: How to Take Egyptian Exports to New Levels?

Youssef¹,

Zaki

2019

View full text Add to dashboard Cite

The Arab Republic of Egypt is yet to meet its exports potential, which has been historically hampered by several domestic market distortions and multiple barriers, resulting in weak export performance and modest regional and global integration. Although the liberalization of the exchange rate in November 2016 was a necessary step to correct the exchange rate misalignment and ease the ensuing shortages in foreign currency, it has not been sufficient to guarantee a notable improvement in export performance. This paper analyzes Egypt's exports along three dimensions that are key for export performance and future growth: (i) composition and relatedness of exported products; (ii) geographic and product concentration; and (iii) relatedness to globally traded products. The analysis suggests that Egypt continues to specialize in traditional areas of comparative advantage and limited value-added or is expanding toward products for which global demand is declining. The paper uses a gravity model to predict bilateral trade flows based on the economic size, geographic distance, and other relevant characteristics that should typically contribute to facilitated trade and identify specific sectors and markets for which Egypt seems to have an untapped potential. To understand this underperformance, the paper investigates the key impediments to meeting the export potential. It explores some of the important supply and demand side factors and assesses the role of trade policy measures (tariffs and non-tariffs barriers) in impeding export growth. The analysis reveals that despite significant liberalization efforts, Egypt remains among the group of developing countries that have the highest frequency index and coverage ratio of non-tariff measures. Policy recommendations include a call to improve external competitiveness by fostering and diversifying domestic production and complement these efforts by engaging in trade facilitation reforms to remove the non-tariffs barriers to trade, notably, the administrative, technical, and sanitary barriers to trade. These are all necessary for the country to capitalize on its competitive gains from the currency depreciation and to improve the degree of Egypt's integration into global markets.

show abstract

Section: Exports and Exchange Ratementioning

confidence: 99%

From Currency Depreciation to Trade Reform: How to Take Egyptian Exports to New Levels?

Youssef¹,

Zaki

2019

View full text Add to dashboard Cite

show abstract

“…The CBE reacted by withdrawing from the net international reserves, which dropped by about USD 11 billion or nearly 42 percent between June 2011 and June 2012 (Central Bank of Egypt, 2011. In an attempt to avoid further declines in the net international reserves, the CBE introduced a new system of dollar auctions through which domestic banks can buy or sell US dollars, which should help in saving the remaining reserves for the purposes of covering the import bill and servicing the external debt (Brixiova, Égert andEssid, 2013, Hosni, 2015).…”

Section: Exchange Rate Regime and Developments -A Historical Overviewmentioning

confidence: 99%

An Assessment of the Real Exchange Rate Misalignment in Egypt: A Structural VAR Approach

Hosni¹

2015

AEF

View full text Add to dashboard Cite

This paper calculates the equilibrium real effective exchange rate for the Egyptian economy during the period . The paper reviews the evolution of Egypt's exchange rate policy and the most significant developments of its real effective exchange rate during the same period. Using a structural vector auto-regression model identified with long-run restrictions, it evaluates the relative importance of real supply, demand and nominal shocks to the disturbances of Egypt's real effective exchange rate. The identified shocks and their impulse responses are consistent with the theoretical priors stemming from the Mundell-Fleming model. The main contribution to the fluctuations of the real effective exchange rate, roughly 80 percent, comes from both real demand and supply shocks. The model is used to check if the real exchange rate in Egypt is misaligned during the period under investigation. It shows that the actual real effective exchange rate has deviated from the equilibrium real effective rate with various degrees during the estimation period.

show abstract

“…Even though the de jure exchange rate regime is a managed float, the IMF"s classifies its exchange rate as a crawling peg since 2012 and as stabilized arrangement in 2010 and 2012. For more details on Tunisia exchange rate regimes, see Brixiova, et al (2013) and Fanizza et al (2002).…”

Section: Tunisiamentioning

confidence: 99%

Exchange Rate Policy Tensions: A Comparative Study between North Africa and Central & Eastern Europe

Massoud¹,

Horváth²

2015

AEF

View full text Add to dashboard Cite

The performance of small open economies depends -to an extent -on the tension between government"s economic policy preferences and actual behavior. This tension can be nicely studied by analyzing the behavior of exchange rates, where one observes tensions between proclaimed de jure and de facto exchange rate policies. Typically a country makes a de jure commitment to a peg if it attempts to persuade markets of its strict monetary-policy priorities; similarly a country makes a de jure commitment to a float if it wants to keep monetary policy in its own hands. In this paper we measure the flexibility of exchange rate which partially helps in deciphering the de facto behavior. For this purpose, we use comparative data of two sets of countries: North African as well as Central and Eastern European.Keywords: Exchange rate policy, de facto exchange rate regimes, and exchange market pressure

show abstract

The Real Exchange Rate and External Competitiveness in Egypt, Morocco and Tunisia

Cited by 4 publications

References 22 publications

From Currency Depreciation to Trade Reform: How to Take Egyptian Exports to New Levels?

From Currency Depreciation to Trade Reform: How to Take Egyptian Exports to New Levels?

An Assessment of the Real Exchange Rate Misalignment in Egypt: A Structural VAR Approach

Exchange Rate Policy Tensions: A Comparative Study between North Africa and Central & Eastern Europe

Contact Info

Product

Resources

About