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Periodical article Periodical article Leiden University catalogue Leiden University catalogue WorldCat catalogue WorldCat
Title:The Real Exchange Rate as a Measure of Competitiveness in Botswana: 1976-1999
Author:Motlaleng, Gaotlhobogwe R.
Periodical:Eastern Africa Social Science Research Review (ISSN 1027-1775)
Notes:biblio. refs., ills.
Geographic terms:Botswana
Southern Africa
Subjects:exchange rates
monetary policy
History and Exploration
Economics and Trade
Economics, Commerce
Foreign exchange rates
External link:http://muse.jhu.edu/journals/eastern_africa_social_science_research_review/v020/20.2motlaleng.pdf
Abstract:This paper computes and compares real exchange rate (RER) indexes for Botswana based on different measures in order to assess Botswana's competitiveness relative to its major trading partners. Two measures of competitiveness, namely the bilateral RERs and the multilateral RERs based on the consumer price indexes (CPI) and the gross domestic product (GDP) deflator show that Botswana has been gaining competitiveness relative to its major trading partners over the study period (1976-1999) - which shows that the Bank of Botswana has indeed achieved its main objective of maintaining a competitive and a credible exchange rate policy. However, a third measure of competitiveness, based on export unit values (EXPV), indicates a loss of competitiveness. These findings coincide with the argument of A. Fleissing and T. Grennes (1994) that for a given base year, some contradictions concerning the direction of currency misalignment can be due to the behaviour of alternative price indexes used in the construction of the RER indexes. Bibliogr., sum. [Journal abstract]