Towards inflation targeting in Egypt: the relationship between exchange rate and inflation

Khodeir, Aliaa Nabil

doi:10.4102/sajems.v15i3.203

Cited by 11 publications

(8 citation statements)

References 17 publications

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“…The study used vector autoregression (VAR). The most important result was the effect of monetary policy on real output Growth in the long-run was limited by its capacity to achieve long-run price stability [7]. analyzed the impact of inflation with the exchange rate during the period of 1990-2008.…”

Section: Literature Reviewmentioning

confidence: 99%

“…concluded that nominal interest rate doesn't affect real domestic credit [6]. Moursi et al concluded that the effect of monetary policy on real output Growth in the long-run was limited by its capacity to achieve long-run price stability [7]. Khodeir concluded that rising in the inflation rate is due to the Egyptian pound's depreciation [8].…”

Section: Impulse Response Function (Irf)mentioning

confidence: 99%

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The Impact of Floating Egyptian Pound on Agricultural Sector in Egypt

El-Rasoul

Ghanem

Shafei

et al. 2021

AJAEES

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This research aimed to estimate the impact of applying flexible exchange rate on the Egyptian agriculture sector. Egypt applied floating exchange rate regime three times during the period 1991-2018. This research is based on some analytical approaches to achieve its objective such as robust regression and vector error correction model (VECM).It concluded that floating of Egyptian pound was not a good decision and it had a negative impact on Egyptian agricultural sector. The positive relationship between real Egyptian agricultural gross domestic product and real agricultural imports as well as the positive relationship between real agricultural imports and dollar exchange rate in Egypt which are not apply the economic logic, proof that the floating exchange rate regime and the macroeconomic policies applied during the study period were not effective as Egypt imports good and service with high prices due to the devaluation of Egyptian pound. So, the growth in agricultural gross domestic product was not real. The Egyptian government should pay more attention on the agricultural sector.

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Section: Literature Reviewmentioning

confidence: 99%

Section: Impulse Response Function (Irf)mentioning

confidence: 99%

The Impact of Floating Egyptian Pound on Agricultural Sector in Egypt

El-Rasoul

Ghanem

Shafei

et al. 2021

AJAEES

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show abstract

“…Furthermore, many other studies also showed that inflation targeting framework is most effective in financial and banking sector stability (Fazio et al, 2015;Tabak et al, 2016;Ismailov et al, 2016;Soe and Kakinaka, 2018;Cornand and M'Baye, 2018). Nevertheless, some studies reported on the efficacy of the inflation targeting framework in exchange rate policy as in Khodeir (2012), who explored the flexible targeting regime…”

Section: Review Of the Literaturementioning

confidence: 99%

Investigation of optimal inflation targets for 15 major oil exporting Sub-Saharan African countries

Abdulqadir

Chua

Mohd

2020

JEFAS

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Purpose The purpose of this paper is to investigate the optimal inflation targets for an appropriate exchange rate policy in 15 major oil exporting countries in Sub-Saharan African (SSA). Design/methodology/approach Dynamic heterogeneous panel threshold techniques are used via threshold-effect test and threshold regression. This procedure is achieved through a grid search and bootstrapping replications method to stimulate the asymptotic distribution of the likelihood ratio test of the null hypothesis on no-threshold as against the alternative hypothesis. The p-values validate the threshold estimates. Findings Findings revealed that the optimal inflation target has a turning point and its impact on the real exchange rate is up to a threshold level of 14.47 per cent. Furthermore, the inflation rate above the threshold level overwhelmingly revealed its effect on real exchange regimes. Research limitations/implications It would have been a good idea to investigate optimal inflation targets for all African countries but due to inadequate data the selection criteria was narrowed to oil-exporting countries in Sub-Saharan Africa. Practical implications Inflation targeting beyond the threshold level would have serious implications on the monetary policy. Originality/value To the best of the knowledge, this is the first study to look at optimal inflation targets for 15 major oil exporting countries in general and SSA countries in particular. The findings provide a critical analysis of an inflation regime for a typical oil-producing country that oil exports being their source of revenue.

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“…In January 2001, the exchange rate was set to crawl within a band of ± 1 percent around the central rate. The band was then widened to ± 3 percent in August 2001 (Hussein & Nos'hy, 2000;Khodeir, 2012). At the end of 2002, the Egyptian economy was facing a real economic predicament; low level of international reserves, high levels of both current account and budget deficits, an excessively overvalued exchange rate.…”

Section: Historical Overview Of the Exchange Rate Policy In Egyptmentioning

confidence: 99%

Examining the nexus between exchange rate volatility and export performance: Empirical evidence from the Egyptian experience

Aly

Hosni

2018

BEH

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This paper investigates the relationship between exchange rate volatility and export performance of the Egyptian economy for the period (1980-2016). Moving average standard deviation and conditional standard deviation from GARCH model are used to generate two different measures of exchange rate volatility. The co-integration results indicate the existence of a unique long-run relationship between the real value of non-petroleum exports (as well as the volume of total exports) and the GARCH measure of exchange rate volatility. Using a Vector Error Correction Model, it is found that the volatility of the real effective exchange rate has a significant negative effect on real exports, whereas the effect of the level of real effective exchange rate itself, is not found to be statistically significant. Relevant policy implications are derived from these results.

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Towards inflation targeting in Egypt: the relationship between exchange rate and inflation

Cited by 11 publications

References 17 publications

The Impact of Floating Egyptian Pound on Agricultural Sector in Egypt

The Impact of Floating Egyptian Pound on Agricultural Sector in Egypt

Investigation of optimal inflation targets for 15 major oil exporting Sub-Saharan African countries

Examining the nexus between exchange rate volatility and export performance: Empirical evidence from the Egyptian experience

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