Exchange rate management policies in Africa : recent experience and prospects

Abstract

African countries have since the collapse of the generalized fixed exchange rate regime and the adoption of a generalized floating system by the industrialized countries in 1973, experimented with various types of exchange rate arrangements, ranging from a peg to a single currency, weighted currency basket, managed floating, to an independently floating exchange rate system. The experiences of various African countries with exchange rate arrangements and management have, therefore, been diverse and varied as these countries have sought to find an "optimal and sustainable" exchange rate regime. Indeed, exchange rate management and determining an optimal and sustainable exchange rate arrangement have been some of the policy challenges facing many monetary authorities in African countries.