Modelling Test Of The Moroccan Real Exchange Rate

Abstract

The purpose of this study is to estimate the real exchange rate an ambiguous and complex concept with a wide literature.

In this paper we have tried to produce an estimate of Morocco’s exchange rate between 1980 and 2008, which is modelled using an error-correction econometric model. It is a dynamic model that aims at modelling the behavioral equilibrium exchange rate, using a series of fundamental variables that essentially determine the exchange rate. The variables used are: foreign direct investment; inflation, as measured by the consumer price index; the balance of trade and the level of economic activity. Thereafter we analyzed the misalignment of this rate through a statistical approach.