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Measuring persistence in nominal exchange rate: Implications for Angola’s entrepreneurship and business development

The International Journal of Latest Trends in Finance and Economic Sciences

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Title Measuring persistence in nominal exchange rate: Implications for Angola’s entrepreneurship and business development
 
Creator Belbute, J M
Delgado, Júlio A.
Monteiro, Suzana C
Pascoa, Teresa
 
Subject —
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Description The purpose of this paper is to measure the degree of persistence in the Kwanza to US Dollar exchange rate. First, our results indicate that nominal exchange rates both in levels and in first differences are I(0), thus implying that the relative purchasing power parity hypothesis for Angola is not rejected. Secondly, we find a significant degree of persistence in both the formal and informal nominal exchange rates. Thirdly, the degree of persistence in the official market is significantly lower than in the formal market, while In first differences, persistence in the official exchange rate is substantially higher than in the informal exchange rate. Lastly, we could not find strong evidence that persistence has changed in levels throughout the sample period. By contrast, there is significant evidence that persistence in first differences has consistently increased after September 2003. These results have important policy implications as the National Bank of Angola is preparing to change its monetary and exchange-rate policy focus to a more inflation-targeting regime and to a more a flexible (or low-managed) exchange-rate regime. Keywords - Nominal exchange rate, persistence, entrepreneurship, business development, Angola
 
Publisher International Journal of Latest Trends in Finance and Economic Sciences
 
Contributor —
 
Date 2017-03-21
 
Type —
 
Format application/pdf
 
Identifier http://ojs.excelingtech.co.uk/index.php/IJLTFES/article/view/1566
10.2047/ijltfesvol6iss3-1180-1193
 
Source International Journal of Latest Trends in Finance and Economic Sciences; Vol 6, No 3 (2016): September; 1180-1193
 
Language en
 
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