The Leading eBooks Store Online 4,353,660 members ⚫ 1,442,818 ebooks

New to eBooks.com?

Learn more

Yemen: Exchange Rate Policy in the Face of Dwindling Oil Exports

Yemen: Exchange Rate Policy in the Face of Dwindling Oil Exports by Todd Schneider
Buy this eBook
US$ 9.00
(If any tax is payable it will be calculated and shown at checkout.)
This paper investigates the likely implications of declining oil production on Yemen's equilibrium exchange rate, and discusses policy options to ensure a smooth transition to a nonoil economy. The empirical results suggest that, as oil production and foreign exchange earnings fall, the Yemeni rial will have to adjust downward in real effective terms to keep pace with the equilibrium exchange rate. In light of strong pass-through from exchange rate depreciation to domestic inflation, this could entail a substantial depreciation in nominal terms. Given the nature of the adjustment, a floating exchange rate regime appears to be the best option, if supported by appropriate macroeconomic policies. However, given public fixation on a exchange rate stability, a softly managed float would be a better option for Yemen whereby the central bank may have to lead the market toward the equilibrium exchange rate.
International Monetary Fund; January 2007
22 pages; ISBN 9781452757193
Read online, or download in secure EPUB or secure PDF format
Title: Yemen: Exchange Rate Policy in the Face of Dwindling Oil Exports
Author: Todd Schneider; Nabil Ben Ltaifa; Faisal Ahmed; Saade Chami