De Jure versus De Facto Exchange Rate Regimes in Sub-Saharan Africa

De Jure versus De Facto Exchange Rate Regimes in Sub-Saharan Africa

Author: 
Slavov, Slavi T.
Publisher: 
Oxford University Press (OUP)
Date published: 
2013
Record type: 
Region: 
Journal Title: 
Journal of African Economies
Source: 
Journal of African Economies, Vol. 22, No. 5, November 2013, pp. 732-756
Abstract: 

There are 22 countries in Sub-Saharan Africa (SSA) with floating exchange rate regimes, de jure. Statistical analysis on monthly data for the past decade reveals that in most cases these exchange rate regimes can be approximated surprisingly well by a soft peg to a basket dominated by the US dollar. The weight on the dollar appears to have fallen somewhat across the continent in the aftermath of the global financial crisis. Replicating the model with weekly data suggests that the focus on the dollar might be even more pronounced at higher data frequencies. While there might be strong arguments in favour of limiting exchange rate volatility in SSA countries, soft-pegging to the dollar does not appear to be the best fit for them, given the currency structure of their external trade and finance.

Language: 

CITATION: Slavov, Slavi T.. De Jure versus De Facto Exchange Rate Regimes in Sub-Saharan Africa . : Oxford University Press (OUP) , 2013. Journal of African Economies, Vol. 22, No. 5, November 2013, pp. 732-756 - Available at: http://library.au.int/de-jure-versus-de-facto-exchange-rate-regimes-sub-saharan-africa-4