Chapter 6. Exchange Rate Regimes and Competitiveness
Author:
Mrs. Harinder K Malothra
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,
Mr. Milan M Cuc
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,
Mr. Ulrich Bartsch
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, and
Mr. Menachem Katz
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Language:
English
Print Publication Date:
23 Jan 2004
Keywords:
ISI; SI; oil-producing country; government; country; revenue; rate market; expansionary fiscal policy bias; monetary policy stance; sound fiscal policy; CEMAC country; Conventional peg; Exchange rate flexibility; Exchange rate adjustments; Oil prices

Abstract

Oil-exporting countries have used a variety of exchange rate arrangements, as shown in Figure 9. At the end of 2001, about 18 of the 29 oil-producing IMF member countries (excluding the former Soviet bloc countries) used some form of fixed exchange rate regime, while 11 opted for either managed or independent floating. This suggests that, in practice, the choice of an exchange rate arrangement is not a straightforward exercise; instead, exchange rate policy has to be based on country-specific considerations, including the relative openness of the economy, in terms of both current and capital accounts, and the relative prevalence of real or nominal shocks. Exchange rate policy will also have to take into account the monetary policy and institutional framework in which it is set.18 This subsection describes first general considerations, then potential advantages of flexible exchange rates, and finally policies in support of fixed exchange rates.

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Cover Lifting the Oil Curse
Lifting the Oil Curse
Improving Petroleum Revenue Management in Sub-Saharan Africa
ISBN:
9781589063174
Publication Date:
23 Jan 2004
Publisher:
International Monetary Fund
DOI:
https://doi.org/10.5089/9781589063174.058
Pages:
73

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