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Forecasting CEMAC’s foreign exchange reserves in presence of unanticipated changes in oil prices: an interrupted time series modelling

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  • Giscard Assoumou-Ella

    (Omar Bongo University, Gabon; University of Toulon, France)

Abstract

The foreign exchange reserves of the Central African Economic and Monetary Community (CEMAC) countries have decreased since the fall of world oil price that began in July 2014. In fact, five of the six of the CEMAC countries are oil producers. Based on interrupted time series modeling, the analysis shows that the unanticipated changes in oil prices immediately led to a decline in the level of their foreign exchange reserves. The trend is also decreasing. The model predicts a continued degradation of these reserves if oil prices remain low. In these conditions, the CEMAC could experience a currency crisis if economic policies implemented in this region do not lead to a return of economic growth.

Suggested Citation

  • Giscard Assoumou-Ella, 2019. "Forecasting CEMAC’s foreign exchange reserves in presence of unanticipated changes in oil prices: an interrupted time series modelling," Journal of Central Banking Theory and Practice, Central bank of Montenegro, vol. 8(2), pages 65-83.
    • Handle: RePEc:cbk:journl:v:8:y:2019:i:2:p:65-83
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    Keywords

    oil prices; CEMAC countries; foreign exchange reserves; interrupted time series analysis.;
    All these keywords.

    JEL classification:

    • E4 - Macroeconomics and Monetary Economics - - Money and Interest Rates
    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit
    • E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook

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