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The study aimed to analyze and measure the dynamic relationship between the exchange rate and the inflation rate in Algeria between1973 and 2017 employing the error correction model and the immediate response functions. The study found that there is a two-way causal relationship between the exchange rate changes and inflation in Algeria. The immediate response function analysis showed that the occurrence of a random shock in the exchange rate has a positive effect on the inflation rate in the short term and a negative effect in the long term, but a random shock in the inflation rate has a positive impact on the exchange rate. [ABSTRACT FROM AUTHOR]

The study aims at determining the causes of the collapse of oil prices and its impact on exchange rates in Algeria, using the co-integration model and ECM for Angel and Granger The study found that the exchange rates in Algeria have a link to and influence on oil prices as a result of Algeria’dependence on the exchange rate policy of floating that is administratively directed in its monetary policy and not on the interest rate so as to its interest in the revenue at the expense of investment. The study has also found the existence of an equilibrium relationship in the long term, and t in the short term acceptable economically, statistically. [ABSTRACT FROM AUTHOR]

The literature emphasizes that equilibrium real exchange been improved are determined by fundamental determinants. The equilibrium real exchange rate has appreciated in the last few years in Algeria, essentially reflecting the increase in government spending, entailing the risks of "Dutch disease" welfare‐reducing effects. Algeria’s main challenge is to manage its volatile external inflows from hydrocarbon exports. The authorities will pursue their efforts to enhance their exchange rate analysis capacity. [ABSTRACT FROM AUTHOR]