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321595

Asymmetric exchange rate pass-through to consumer prices in Egypt

Article

Last updated: 04 Jan 2025

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Tags

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Abstract

This paper investigates the exchange rate pass-through to consumer prices in Egypt during the period (1960- 2020). A Nonlinear Autoregressive Distributed Lags (NARDL) model is employed to isolate domestic currency depreciations from its appreciations and to account for the potential asymmetry in the impact of the exchange rate on consumer prices. The results of the study show evidence of asymmetric pass-through to consumer prices in the long run. The exchange rate pass-through effect is found to be positive but incomplete in the periods of domestic currency depreciation and statistically insignificant in the periods of currency appreciation. These results are consistent with the stickiness of prices downwards. Accordingly, we recommend that the Egyptian monetary authority should carefully and consistently monitor the behavior of the exchange rate and adopt efficient exchange rate management policies so as to reduce exchange rate fluctuations, resist the inflationary pressures arising from the external sector and ensure the stability of consumer prices.

DOI

10.21608/jocu.2023.200721.1261

Keywords

Asymmetric exchange rate pass through, Inflation, Non linear ARDL, Egypt

Authors

First Name

Rania Anis

Last Name

Elsharkawy

MiddleName

-

Affiliation

Department of Economics, Faculty of Economic Studies and Political science, Alexandria university

Email

rania.elsharqawy@alexu.edu.eg

City

-

Orcid

0000000237441876

First Name

Ahmed Wassal

Last Name

Elroukh

MiddleName

-

Affiliation

Department of Economics, Faculty of Economic Studies and Political Science, Alexandria University

Email

awelroukh@alexu.edu.eg

City

-

Orcid

0000-0002-2797-4812

Volume

21

Article Issue

20

Related Issue

43949

Issue Date

2023-10-01

Receive Date

2023-03-17

Publish Date

2023-10-01

Page Start

451

Page End

470

Print ISSN

2636-4166

Online ISSN

2735-3176

Link

https://jocu.journals.ekb.eg/article_321595.html

Detail API

https://jocu.journals.ekb.eg/service?article_code=321595

Order

321,595

Type

مقالات سیاسیة واقتصادیة

Type Code

1,296

Publication Type

Journal

Publication Title

مجلة السياسة والاقتصاد

Publication Link

https://jocu.journals.ekb.eg/

MainTitle

Asymmetric exchange rate pass-through to consumer prices in Egypt

Details

Type

Article

Created At

25 Dec 2024