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Africa > Uganda

You are looking at 1 - 10 of 28 items for :

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  • Foreign Exchange x
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Cover IMF Working Papers
Panel Nowcasting for Countries Whose Quarterly GDPs are Unavailable
Omer Faruk Akbal
,
Mr. Seung M Choi
,
Mr. Futoshi Narita
, and
Jiaxiong Yao
Quarterly GDP statistics facilitate timely economic assessment, but the availability of such data are limited for more than 60 developing economies, including about 20 countries in sub-Saharan Africa as well as more than two-thirds of fragile and conflict-affected states. To address this limited data availablity, this paper proposes a panel approach that utilizes a statistical relationship estimated from countries where data are available, to estimate quarterly GDP statistics for countries that do not publish such statistics by leveraging the indicators readily available for many countries. This framework demonstrates potential, especially when applied for similar country groups, and could provide valuable real-time insights into economic conditions supported by empirical evidence.
Keywords:
Developing economies; fragile and conflict-affected states; GDP; low-income countries; nowcasting; sub-Saharan Africa; GDP statistic; panel Nowcasting; data availability; growth data; annex II; data availablity; Commodity prices; Purchasing power parity; Data collection; Export fluctuations; Global
Cover IMF Working Papers
Impact of COVID-19: Nowcasting and Big Data to Track Economic Activity in Sub-Saharan Africa
Brandon Buell
,
Reda Cherif
,
Carissa Chen
,
Jiawen Tang
, and
Nils Wendt
The COVID-19 pandemic underscores the critical need for detailed, timely information on its evolving economic impacts, particularly for Sub-Saharan Africa (SSA) where data availability and lack of generalizable nowcasting methodologies limit efforts for coordinated policy responses. This paper presents a suite of high frequency and granular country-level indicator tools that can be used to nowcast GDP and track changes in economic activity for countries in SSA. We make two main contributions: (1) demonstration of the predictive power of alternative data variables such as Google search trends and mobile payments, and (2) implementation of two types of modelling methodologies, machine learning and parametric factor models, that have flexibility to incorporate mixed-frequency data variables. We present nowcast results for 2019Q4 and 2020Q1 GDP for Kenya, Nigeria, South Africa, Uganda, and Ghana, and argue that our factor model methodology can be generalized to nowcast and forecast GDP for other SSA countries with limited data availability and shorter timeframes.
Keywords:
model prediction; quantile plot; ML model; GDP YoY; data variable; YoY percent change; Factor models; Machine learning; Time series analysis; Spot exchange rates; Mobile banking; Africa; Sub-Saharan Africa
Cover IMF Working Papers
Policy Responses to Aid Surges in Countries with Limited International Capital Mobility: The Role of the Exchange Rate Regime
Mr. Andrew Berg
,
Mr. Rafael A Portillo
, and
Luis-Felipe Zanna
We study the role of the exchange rate regime, reserve accumulation, and sterilization policies in the macroeconomics of aid surges. Absent sterilization, a peg allows for almost full aid absorption — an increase in the current account deficit net of aid—delivering the same effects as those of a flexible regime but with a necessary increase in inflation. Regardless of the regime, policies that limit absorption—and result in large accumulation of reserves—are welfare reducing: they help reduce the real appreciation (and inflation under the peg), but at the expense of reducing private consumption and investment, and therefore medium-term growth.
Keywords:
WP; exchange rate; central bank; managed float; Africa; Aid; Exchange Rate Regimes; Reserve Accumulation Policies; Sterilization Policies; Transfer Problem; appreciation pressure; nominal exchange rate; depreciation rate; managed float regime; nominal interest rate; open economy; inflation expectation; real gross domestic product; transmission mechanism; expenditure switching; flexible exchange rate regime; reserve holding; Exchange rate arrangements; Reserves accumulation; Sterilization; Conventional peg; Exchange rate flexibility; Sub-Saharan Africa
Cover IMF Working Papers
The Monetary Transmission Mechanism in the Tropics: A Narrative Approach
Mr. Andrew Berg
,
Ms. Luisa Charry
,
Mr. Rafael A Portillo
, and
Mr. Jan Vlcek
Many central banks in low-income countries in Sub-Saharan Africa are modernising their monetary policy frameworks. Standard statistical procedures have had limited success in identifying the channels of monetary transmission in such countries. Here we take a narrative approach, following Romer and Romer (1989), and center on a significant tightening of monetary policy that took place in 2011 in four members of the East African Community: Kenya, Uganda, Tanzania and Rwanda. We find clear evidence of the transmission mechanism in most of the countries, and argue that deviations can be explained by differences in the policy regime in place.
Keywords:
WP; exchange rate; Kenya; central bank; rate; Uganda; Monetary Transmission Mechanisms; Low Income Countries; core inflation; nominal exchange rate; policy regime; headline inflation; interest rate transmission mechanism; economic structure; excess reserves; interest rate channel; exchange rate pressure; exchange rate channel; monetary policy response; Exchange rates; Inflation; Short term interest rates; Central bank policy rate; Exchange rate arrangements; Global
Cover IMF Working Papers
Monetary Transmission Mechanism in the East African Community: An Empirical Investigation
Mr. Hamid R Davoodi
,
S. V. S. Dixit
, and
Gabor Pinter
Do changes in monetary policy affect inflation and output in the East African Community (EAC)? We find that (i) Monetary Transmission Mechanism (MTM) tends to be generally weak when using standard statistical inferences, but somewhat strong when using non-standard inference methods; (ii) when MTM is present, the precise transmission channels and their importance differ across countries; and (iii) reserve money and the policy rate, two frequently used instruments of monetary policy, sometimes move in directions that exert offsetting expansionary and contractionary effects on inflation—posing challenges to harmonization of monetary policies across the EAC and transition to a future East African Monetary Union. The paper offers some suggestions for strengthening the MTM in the EAC.
Keywords:
WP; price level; contractionary monetary policy; exchange rate; central bank; money multiplier; Monetary policy; reserve money; policy rate; vector autoregressions; monetary policy shock; transmission mechanism; monetary policy authority; interest rate channel; rising prices; monetary policy transmission; Monetary base; Central bank policy rate; Vector autoregression; Credit; Exchange rates; Global
Cover IMF Working Papers
Exchange Rate Liberalization in Selected Sub-Saharan African Countries Successes, Failures, and Lessons
Mr. Nils O Maehle
,
Ms. Haimanot Teferra
, and
Mrs. Armine Khachatryan
Many sub-Saharan African (SSA) countries liberalized their economies in the 1980s and early 1990s. This paper reviews the foreign exchange regime reforms in selected SSA, and their associated macroeconomic policies and economic performance during and after these reforms were undertaken. Before liberalization, most of the reviewed countries were characterized by extensive foreign exchange rationing, sizeable black market premiums, and declining per capita real income. Today, the countries that successfully reformed look markedly different. Rationing and parallel market spreads are a distant memory, and per capita income has increased sharply.
Keywords:
WP; exchange rate; U.S. dollar; government; country; headline inflation; proceeds; Exchange rate regimes; reforms; growth; inflation; structural adjustment; managed float; per capita income; inflation rate; exchange rate liberalization; stabilization effort; exchange rate depreciation; U.S. dollar exchange rate; adjustable peg; auction market; overvalued exchange rate; Exchange rates; Exchange rate arrangements; Currency markets; Sub-Saharan Africa
Cover IMF Working Papers
The East African Community: Prospects for Sustained Growth
Ms. Catherine McAuliffe
,
Ms. Sweta Chaman Saxena
, and
Mr. Masafumi Yabara
The East African Community (EAC) has been among the fastest growing regions in sub-Saharan Africa in the past decade or so. Nonetheless, the recent growth path will not be enough to achieve middle-income status and substantial poverty reduction by the end of the decade—the ambition of most countries in the region. This paper builds on methodologies established in the growth literature to identify a group of countries that achieved growth accelerations and sustained growth to use as benchmarks to evaluate the prospects, and potential constraints, for EAC countries to translate their recent growth upturn into sustained high growth. We find that EAC countries compare favorably to the group of sustained growth countries—macroeconomic and government stability, favorable business climate, and strong institutions—but important differences remain. EAC countries have a smaller share of exports, lower degree of financial deepening, lower levels of domestic savings, higher reliance on donor aid, and limited physical infrastructure and human capital. Policy choices to address some of these shortcomings could make a difference in whether the EAC follows the path of sustained growth or follows other countries where growth upturns later fizzled out. 
Keywords:
WP; EAC country; EAC member; growth acceleration; EAC economy; EAC growth; Accelerated growth; sustained growth; benchmarking; East African Community; sub-Saharan Africa; EAC integration; exchange rate; private sector; common market; Exports; Financial sector; Government debt management; Productivity; Real exchange rates; Africa; Global
Cover IMF Working Papers
How Effective is Monetary Transmission in Low-Income Countries? A Survey of the Empirical Evidence
Ms. Prachi Mishra
and
Mr. Peter J Montiel
This paper surveys the evidence on the effectiveness of monetary transmission in low-income countries. It is hard to come away from this review with much confidence in the strength of monetary transmission in such countries. We distinguish between the "facts on the ground" and "methodological deficiencies" interpretations of the absence of evidence for strong monetary transmission. We suspect that "facts on the ground" are an important part of the story. If this conjecture is correct, the stabilization challenge in developing countries is acute indeed, and identifying the means of enhancing the effectiveness of monetary policy in such countries is an important challenge.
Keywords:
WP; price level; aggregate demand; bond market; central bank; monetary aggregate; monetary policy; exchange rate; interest rate; banks; institutions; developing countries; bank lending channel; regime indicator; nominal exchange rate; lending rate; Bank credit; Securities markets; Stock markets; Exchange rate arrangements; Exchange rates; Sub-Saharan Africa; Central and Eastern Europe; Central Asia; Middle East; North Africa
Cover IMF Working Papers
When and Why Worry About Real Exchange Rate Appreciation? The Missing Link Between Dutch Disease and Growth
International Monetary Fund
We review the literature on Dutch disease, and document that shocks that trigger foreign exchange inflows (such as natural resource booms, surges in foreign aid, remittances, or capital inflows) appreciate the real exchange rate, generate factor reallocation, and reduce manufacturing output and net exports. We also observe that real exchange rate misalignment due to overvaluation and higher volatility of the real exchange rate lower growth. Regarding the effect of undervaluation of the exchange rate on economic growth, the evidence is mixed and inconclusive. However, there is no evidence in the literature that Dutch disease reduces overall economic growth. Policy responses should aim at adequately managing the boom and the risks associated with it.
Keywords:
WP; natural resource; DD effect; exchange rate appreciation; open economy; DD shock; real exchange rate; Dutch disease; growth; exchange rate overvaluation; exchange rate volatility; learning by doing; exchange rate intervention; DD phenomenon; undervalued exchange rate; Dutch disease effects; overvalued exchange rate; DD model; Real exchange rates; Natural resources; Exchange rates; Asia and Pacific; Caribbean; Sub-Saharan Africa
Cover IMF Working Papers
Measuring Financial Barriers Among East African Community Countries
Yi David Wang
This paper seeks to quantify existing financial barriers among East African Community (EAC) member countries based on analysis of each member country’s foreign exchange market. The primary contribution of this paper is the generation of an aggregate measure of financial barriers for the three relatively more advanced members (Kenya, Uganda, and Tanzania) using forward foreign exchange and interbank interest rate data. Its empirical results, which are corroborated by other evidence such as the levels of development of the financial markets and restrictions on capital flows, suggest that Kenya is the EAC’s most financially open country, followed by Uganda, and then Tanzania. The fact that the three countries exhibit different degrees of financial openness suggests that financial integration in the EAC region has a way to go.
Keywords:
WP; EAC country; foreign exchange market; exchange rate; dollar; Forward rates; foreign exchange; financial barrier; financial integration; EAC member; EAC currency; spot market; Kenya shilling; Currency markets; Interest rate parity; Currencies; Interbank rates; Global