Factors Affecting the Exchange Rate in Sudan (1972-2013)
Journal Title: International Journal of Economics, Commerce and Research (IJECR) - Year 2018, Vol 8, Issue 2
Abstract
Since independence, Sudan has experienced poor economic performance attributed to external as well as domestic factors, particularly policy failure and resource mismanagement. However, Exchange rate policy is one of the most important price policy tools and it is directly linking to the current account situation of the country. This study performs to test hypotheses, based on stationary tests (unit root test) focusing on the augmented Ddickey fuller test and make a co- integration test by using the method of (Johansson test) to ensure the existence of a long-term equilibrium relationship between the variables of the model. Moreover, estimated model parameters by ordinary least squares (OLS) for the econometrics model. In addition, need to match the estimated model according to economic, statistical criteria and it is free of the econometrics problems. On the other hand, the model should be having the predictive ability tested by Thiele inequality coefficient. The results of statistical tests showed that the variables of the study suffers non- stationary, but stable levels in the first difference at the level of significance (5%) except exchange rate was stable in the second difference. Moreover, the results reveal a balance in the long-term relationship between the variables of the model. The value of the coefficient of determination, equal (87%), indicating that (13%) of changes in exchange rate attributed to other variables not included in the model. In addition, a statistically significant positive relationship between the exchange rate and (the gross domestic product, openness degree), also statistically significant negative relationship between the exchange rate and (the domestic inflation, money supply, and foreign reserves). This study concluded in a statistically significant relationship between the variables (factors) in the exchange rate model. However, this relationship either positive (GDP, Op) or negative (INF, Ms, and Rs) with the exchange rate in Sudan during the study period.
Authors and Affiliations
MULHEM YOUSIF DAF ALLA, SIHAM ABDALATEEF AHMED
Keywords
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- EP ID EP343930
- DOI 10.24247/ijecrapr20186
- Views 173
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