Theoretical and Applied Economics
No. 3 / 2017 (612), Autumn
Hard currency inflows and sterilization policy in Algeria: An ARDL approach
University of Larbi Ben M’hidi Oum El Bouaghi, Algeria
Hicham AYAD
University of Abu Bakr Belkaid Tlmecen, Algeria
Abstract. This paper aims to explore to what degree the Algerian Bank sterilized hard currency inflows using monthly data covering the period January 2002-December 2016, by estimating a sterilization coefficient in both long and short run terms using and ARDL approach, and also by applying a TYDL Granger causality to investigate the relationship among concerned variables. Our results showed that there are four co-integration vectors among the variables, and the evidence suggested that the sterilization coefficient is equal to -0.99, i.e. near to the minus one (-1) which indicates the full sterilization (Algerian Bank roughly sterilizes 99% of the frequent hard currency inflows in both short-run and long-run terms). Indeed, the results also indicated that there are three unidirectional causalities running from Algerian bank’s net domestic and foreign assets to the money multiplier and from the latter to the interest rate.
Contents
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Does institutional environment affect the economic development? Evidence from selected CEE countries
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Long-memory, self-similarity and scaling of the long-term government bond yields: Evidence from Turkey and the USA
Hard currency inflows and sterilization policy in Algeria: An ARDL approach
Evaluating Indian economy’s vulnerability to currency crisis
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