University of Khartoum

The Controversy of Exchange Rate Devaluation in Sudan: An Economy-wide General Equilibrium Assessment back

The Controversy of Exchange Rate Devaluation in Sudan: An Economy-wide General Equilibrium Assessment back

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dc.contributor.author Siddig, Khalid H.A.
dc.date.accessioned 2014-09-23T10:31:53Z
dc.date.available 2014-09-23T10:31:53Z
dc.date.issued 2011-08
dc.identifier.citation Agricultural Economics Working Paper Series, Khartoum Univ ersity . en_US
dc.identifier.issn 1858-6287
dc.identifier.uri http://hdl.handle.net/123456789/2167
dc.description.abstract The international Monitory Fund (IMF) has been working with Sudan since 1997 to implement macroeconomic reforms including a managed float of the exchange rate (EXR). The IMF sees the EXR flexibility as key to safeguard and rebuild foreign exchange reserves and essential to meet the international reserve target in Sudan. However, the authorities in Sudan are concerned that greater exchange rate flexibility could contribute to inflationary pressures. In addition, a review of literature focusing on the exchange rate policies in Sudan reflects huge ambiguity about its outcome. This calls for additional empirical investigations that provide economy wide assessments of the various possible scenarios that could be adopted in the Sudanese context. Accordingly, the current paper applies an economy-wide impact assessment tool to investigate the possible effects of devaluating the overvalued (according to the IMF, 2009) Sudanese pound. Namely, it uses a Computable General Equilibrium (CGE) model together with its detailed database of Sudan to simulate the Sudanese pound to depreciate according to three different scenarios by 5%, 10%, and 15%. Results of the paper recommend that the additional flexibility in the Sudanese EXR regime suggested by the IMF should be carefully considered if that would lead the value of the Sudanese currency to be devalued. This imply that the authorities in Sudan should closely monitor and control the EXR to avoid its depreciation in the short run, while encouraging both public and private investments to help creating additional jobs that increases domestic income and reduces the negative consequences of inflation. en_US
dc.description.sponsorship Khartoum University en_US
dc.language.iso en en_US
dc.publisher Department of Agricultural Economics, Faculty of Agriculture, Khartoum University en_US
dc.relation.ispartofseries Agricultural Economics Working Paper Series;2 (2011)
dc.subject devaluation, Sudan, CGE analysis, inflation, Sudanese pound en_US
dc.title The Controversy of Exchange Rate Devaluation in Sudan: An Economy-wide General Equilibrium Assessment back en_US
dc.type Article en_US

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