Inflation, exchange rate pass through in Algeria

الملخص EN

The objective of this research paper is study & analyse the reaction of inflation, resulting from fluctuations in nominal Exchange Rate in Algeria, via building a Vector Auto Regression model.

Where we adopted for: Nominal Exchange Rate, Money Supply and Oil Prices as independent variables.

The results of research show that Exchange Rate Pass-through during the studied period is significant, and plays a role very important in explaining the behaviour of inflation rates in Algeria.

It also turns that the rest of variables are very important tools to control the general price level.