Abstract

This study aims to measure the short and long-term impact of exchange rate fluctuations on balance of payments balances from 1990 to 2018.The study was divided into four models using an Autoregressive- Distributed lag (ARDL) model. The study concluded that the impact of the exchange rate on the current account is positive in the long term. An increase in the exchange rate (the depreciation of the Algerian dinar) leads to an improvement in the current account in the long run, but a decline in the short run at 1 and 2 lags, which is consistent with economic theory based on the flexibility approach. The long-term effect of the exchange rate on the capital account is also positive in the short term at the start of the period. Whereas at one degree of lag, the effect on the capital account is negative. According to the third model, the effect of the exchange rate on the total balance of payments is negative in the long and short term, whereas the fourth model shows that the effect of the real effective exchange rate on the total balance of payments is negative in the long and short term at a degree of delay of 1, but positive at the start of the period. The study recommended that the variation of the Algerian dinar exchange rate alone is not sufficient to affect the balance of payments taking in consideration the dependance on hydrocarbons as a source of income.
KeyWords: Exchange Rate, Balance Of Payment, Fluctuations, Current Account, Trade Balance, Capital Account, Algerian Dinar, Autoregressive- Distributed lag.

Information

Item Type:	Thesis
Divisions:	» Faculty of Economic, Commercial and Management Sciences
ePrint ID:	2922
Date Deposited:	2022-03-14
Further Information:	Google Scholar
URI:	https://www.univ-soukahras.dz/en/publication/article/2922

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