Topics in Middle Eastern and North African Economies
Document Type
Article
Publication Date
5-1-2014
Abstract
The goal of this study is to investigate the relationship between oil price and the nominal US Dollar/Algerian Dinar exchange rate through an empirical analysis using a VAR Model (Vector Autoregressive Model) upon monthly data for the period 2003-2013. Results show that a cointegration relationship is not detected between the oil and exchange rate in Algeria. However, the estimation of a VAR model indicates that a 1% increase in oil price would tend to depreciate Algerian Dinar against US Dollar by nearly 0.35%. This negative impact emphasizes how the Algerian dinar is a non-oil currency and explains how the foreign exchange receipts from hydrocarbon exports help swell Algerian public spending that would cater for public budget deficit curtailment.
Identifier
2334-282X
Journal Title
Topics in Middle Eastern and North African Economies
ISSN
2334-282X
Publisher
Middle East Economic Association and Loyola University Chicago
Volume
16
Recommended Citation
Benhabib, Abderrezak; Mohammed Kamel, Si; and Maliki, Samir, "The Relationship Between Oil Price and the Algerian Exchange Rate". Topics in Middle Eastern and North African Economies, electronic journal, 16, Middle East Economic Association and Loyola University Chicago, 2014, http://www.luc.edu/orgs/meea/
Creative Commons License
This work is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 License.
Copyright Statement
© 2014 the authors
Comments
Presentation of the articles in the Topics in Middle Eastern and North African Economies was made possible by a limited license granted to Loyola University Chicago and Middle East Economics Association from the authors who have retained all copyrights in the articles. http://www.luc.edu/orgs/meea/volume16/meea16.htm