Institutional Repository

Modelling long-run equilibrium exchange rate in Botswana

Show simple item record

dc.contributor.author Njindan Iyke , Bernard
dc.date.accessioned 2015-08-21T10:08:33Z
dc.date.available 2015-08-21T10:08:33Z
dc.date.issued 2015-08
dc.identifier.uri http://hdl.handle.net/10500/18978
dc.description.abstract In this paper, we have estimated the equilibrium real exchange rate for Botswana. We have also reviewed the exchange rate regimes pursued by Botswana from independence to date. The evidence suggests that Botswana operated a fixed exchange rate without adjustable pegs from 1966-1976; a fixed exchange with adjustable pegs from 1976-1980; and a fixed exchange with a currency basket from 1980 to date. From the ARDL bounds testing procedure, we found that the fundamental determinants of the equilibrium real exchange rate in Botswana are: the terms of trade and trade openness. The actual real exchange rate appears to have deviated significantly from the equilibrium exchange rate. Perhaps more worrying is the fact that our estimated speed of adjustment is very slow. This means that significant deviations are not corrected fast enough annually. Policymakers in Botswana are encouraged to pursue policies, which could raise the adjustment parameter, in order to avoid excess misalignments, when going forward. en
dc.subject Real Exchange Rate, Equilibrium Exchange Rate, Botswana en
dc.title Modelling long-run equilibrium exchange rate in Botswana en
dc.type Working Paper en
dc.description.department Colleges of Economic and Management Sciences en
dc.contributor.author2 Odhiambo, Nicholas M.


Files in this item

This item appears in the following Collection(s)

Show simple item record

Search UnisaIR


Browse

My Account

Statistics