Title:
WHAT EXCHANGE RATE POLICY FOR SUSTAINABLE ECONOMIC GROWTH IN THE CENTRAL AFRICAN ECONOMIC AND MONETARY COMMUNITY?

Authors:
Philémon NSI ELLA, Gabriel ZOMO YEBE and Pierre Gaëtan ANGO, Gabon

Abstract:

The purpose of this reflection was to analyze the relevance of the current proposals for reforms of the franc zone, based on the long-term relationship between the real exchange rate and sustainable economic growth. To this end, we are developing a non-structural VAR model that describes the interaction between the real exchange rate and macroeconomic variables, which are at stake in current debates, in particular, foreign exchange reserves, real imports and exports, and sustainable growth. Our results tend to give the proponents of exiting the franc zone the right. The real exchange rate does not cause any targeted variables. Only foreign exchange reserves influence the exchange rate. CEMAC's exchange rate policy is not autonomous and cannot solve the problems facing the sub-region. On the other hand, by influencing the exchange rate, the centralization of currencies remains essential. However, it is possible to centralize these foreign exchange reserves at BEAC. However, the effectiveness of an autonomous monetary and exchange rate policy will only be beneficial if the CEMAC countries have a common industrial policy.