Does the Incomplete Exchange Rate Pass-through Exist in Sudan?

Ibrahim, Ahmed Abdu Allah; Bashir, Mohamed Sharif

doi:10.37284/eajbe.3.1.394

Cited by 3 publications

(2 citation statements)

References 12 publications

(15 reference statements)

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“…Both tables show that in all cases, the unit root hypothesis cannot be rejected. Therefore, It can be concluded that most variables are I (1), except for trade balance, which was stationary at level, a result confirmed by numerous other studies such as Ibrahim and Bashir [36]; Bashir and Ibrahim, [50]; Ibrahim and Bashir, [53]; Wu [54].…”

Section: Unit Root Testssupporting

confidence: 76%

The Effects of Currency Devaluation on the Bilateral Trade Balance of Sudan: Cointegration and Error-Correction Modeling

Ibrahim

Bashir

2023

JEMT

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The purpose of this research paper is to investigate the effects of exchange rate, income and money supply on the trade balance of Sudan over a fifty-year period from 1970 to 2020. The empirical model for this investigation is developed using a cointegration approach and error-correction technique to specifically examine the effects of currency devaluation on the trade balance of Sudan with its major partners. The bounds test shows that the variables of interest are bound together in the long-run. The associated equilibrium correction is significant, thus confirming the existence of a long-run relationship. Moreover, to analyze the dynamic interactions of the variables included in the estimated model, variance decomposition is employed. The study results from the variance decomposition show that innovations in foreign income contribute highly to the forecast error variance of the trade balance compared with other explanatory variables in the short-run. In contrast, the domestic money supply contributes highly to the trade balance compared with other variables in the long-run. A key finding of the study suggests that the devaluation of Sudan’s currency is not an appropriate step toward improving the country's trade balance position.

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Section: Unit Root Testssupporting

confidence: 76%

The Effects of Currency Devaluation on the Bilateral Trade Balance of Sudan: Cointegration and Error-Correction Modeling

Ibrahim

Bashir

2023

JEMT

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“…This phenomenon, i.e., dependence upon foreign financing as well as domestic borrowing rather than taxation and savings, provoked a decline in the availability of goods for exports, rapid inflation, high imports, and debt service. Even a series of devaluation decisions have been taken, as recommended by the International Monterey Fund (IMF), but there has been no sign of recovery (Ibrahim & Bashir, 2021;. The income facilitated by international exchange via export is primarily used to repay foreign debts, including payments arrears and government deficits, which have increased sharply.…”

Section: Introductionmentioning

confidence: 99%

Determining factors in the influx of foreign direct investment to Sudan: Implementing Autoregressive Distributed Lag (ARDL)

Bashir,

Ibrahim

2023

JOMEINO

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The purpose of this study was to examine foreign direct investment (FDI) in the context of Sudan between the years 1990 and 2020 by using the bounds testing method of cointegration and the error-correction model. As per the results, it can be understood that the variables considered for the study are combined on a long-term basis if FDI remains a dependent variable. Further, a significant equilibrium correction was found, which supports the existence of a longterm relationship. A number of internal and external factors (especially gross domestic product (GDP), trade openness, inflation, exchange rate, and growth rate, as well as additional macroeconomic indicators such as investment/GDP) were found to impact the state of FDI in Sudan. The variables showed no causalities as per the outcomes of the Granger causality test. Moreover, as per the variance decomposition results, the forecast error variance of FDI, in addition to that of GDP, investment/GDP, and inflation, was found to be self-explanatory. Additionally, as per the impulse response functions, the results demonstrated a short-term negative association between GDP and FDI, suggesting that Sudan possesses inadequate absorptive capacity for promoting its economy using FDI. The results of this research emphasized how selective public policies can be utilized to promote FDI and consequently facilitate short-and long-term economic growth. Therefore, it is useful to recommend some policy implications to promote the application of FDI in Sudan.

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Factors Affecting the Change of the Exchange Rate of Vietnam Dong

Jing

2022

Applied Economics and Policy Studies

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Does the Incomplete Exchange Rate Pass-through Exist in Sudan?

Cited by 3 publications

References 12 publications

The Effects of Currency Devaluation on the Bilateral Trade Balance of Sudan: Cointegration and Error-Correction Modeling

The Effects of Currency Devaluation on the Bilateral Trade Balance of Sudan: Cointegration and Error-Correction Modeling

Determining factors in the influx of foreign direct investment to Sudan: Implementing Autoregressive Distributed Lag (ARDL)

Factors Affecting the Change of the Exchange Rate of Vietnam Dong

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