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Book Cover
Author Yelten, Sibel, author

Title Choosing the correct currency anchor for a small economy : the case of Nepal / prepared by Sibel Yelten
Published [Washington, D.C.] : International Monetary Fund, [2004]
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Description 1 online resource (15 pages)
Series IMF working paper ; WP/04/142
IMF working paper ; WP/04/142
Summary This paper uses the Sjaastad model to estimate the optimal currency area for the Nepalese rupee and concludes that, currently, Nepal may be reasonably well off with its peg to the Indian rupee. As its economy opens and its trade base and trading partners expand, it may want to reevaluate whether moving toward an exchange rate basket including the U.S. dollar may be a better policy choice. The regression results indicate that, currently, the prices of imported goods in Nepal are solely influenced by India, suggesting that with the peg to the Indian rupee, Nepal can isolate the import side of its economy completely from external shocks. On the export side, the regression results indicate that Nepalese export prices seem, to a large extent, to be influenced by U.S. prices. However, the export price index had to be constructed, and the construction methodology is likely to entail an overestimation of the impact of the U.S. dollar
Notes "August 2004."
At head of title: Asia and Pacific Department
Master and use copy. Digital master created according to Benchmark for Faithful Digital Reproductions of Monographs and Serials, Version 1. Digital Library Federation, December 2002. MiAaHDL
digitized 2010 HathiTrust Digital Library committed to preserve pda MiAaHDL
Print version record
Subject Currency question -- Nepal.
Exports -- Prices -- Nepal.
Foreign exchange administration -- Nepal.
Rupee, Indian.
Form Electronic book
Author International Monetary Fund. Asia and Pacific Department, issuing body
ISBN 1282048279
145190147X (E-Book)