The role of Algeria's exchange rate policy in absorbing the impact of external shocks : the case of the 2014 oil shock

Abstract EN

This study aimed to highlight the importance of using exchange rate flexibility in oil-exporting economies as an effective tool to orb the negative impacts of external shocks, with a special reference to the case of Algeria, which has faced difficult challenges resulting from the shock of the collapse of oil prices that has continued since June 2014, and its severe repercussions on the country's overall economic performance, notably the slowdown in economic activity, the widening of fiscal and the current account deficits.

The study concluded that the devaluation that the Bank of Algeria allowed in the external value of the dinar, in the aftermath of the oil shock, has not facilitated the suitable external adjustment of the Algerian economy.