On Egypt's de facto Integration in the International Financial Market

This study explores whether Egypt has become de facto perfectly integrated in the international financial market following the steps taken towards the de jure liberalization of the capital and financial accounts of the balance of payments since the early 1990s. It does so by running two empirical te...

Full description

Bibliographic Details
Main Author:	Alnashar, Sara B.
Format:	Journal Article
Language:	en_US
Published:	Taylor and Francis 2015
Subjects:	financial internationalization granger-causality vector error correction model uncovered interest parity monetary autonomy capital account balance of payments financial integration
Online Access:	http://hdl.handle.net/10986/23520

id	okr-10986-23520
recordtype	oai_dc
spelling	okr-10986-235202021-04-23T14:04:15Z On Egypt's de facto Integration in the International Financial Market Alnashar, Sara B. financial internationalization granger-causality vector error correction model uncovered interest parity monetary autonomy capital account balance of payments financial integration This study explores whether Egypt has become de facto perfectly integrated in the international financial market following the steps taken towards the de jure liberalization of the capital and financial accounts of the balance of payments since the early 1990s. It does so by running two empirical tests, namely, the uncovered interest parity and the monetary autonomy tests using monthly data for the periods January 2000–December 2011 and July 2004–June 2008. The outcome of both tests indicates that during the periods under investigation, Egypt has maintained imperfect de facto integration in the international financial market, despite the de jure financial openness. To explore the reasons behind such imperfect de facto integration, the study estimates a vector error-correction model (VECM) using quarterly data for the period 2001/2002–2010/2011. According to the variance decompositions generated from the VECM, high inflation rate in Egypt has been a major contributor to the variability of the spread between interest rates on domestic and foreign financial assets, and thus could be deemed as a culprit behind Egypt's imperfect de facto integration. 2015-12-28T16:27:06Z 2015-12-28T16:27:06Z 2015-09-29 Journal Article Middle East Development Journal 1793-8120 http://hdl.handle.net/10986/23520 en_US CC BY-NC-ND 3.0 IGO http://creativecommons.org/licenses/by-nc-nd/3.0/igo World Bank Taylor and Francis Publications & Research :: Journal Article Publications & Research Egypt, Arab Republic of
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	en_US
topic	financial internationalization granger-causality vector error correction model uncovered interest parity monetary autonomy capital account balance of payments financial integration
spellingShingle	financial internationalization granger-causality vector error correction model uncovered interest parity monetary autonomy capital account balance of payments financial integration Alnashar, Sara B. On Egypt's de facto Integration in the International Financial Market
geographic_facet	Egypt, Arab Republic of
description	This study explores whether Egypt has become de facto perfectly integrated in the international financial market following the steps taken towards the de jure liberalization of the capital and financial accounts of the balance of payments since the early 1990s. It does so by running two empirical tests, namely, the uncovered interest parity and the monetary autonomy tests using monthly data for the periods January 2000–December 2011 and July 2004–June 2008. The outcome of both tests indicates that during the periods under investigation, Egypt has maintained imperfect de facto integration in the international financial market, despite the de jure financial openness. To explore the reasons behind such imperfect de facto integration, the study estimates a vector error-correction model (VECM) using quarterly data for the period 2001/2002–2010/2011. According to the variance decompositions generated from the VECM, high inflation rate in Egypt has been a major contributor to the variability of the spread between interest rates on domestic and foreign financial assets, and thus could be deemed as a culprit behind Egypt's imperfect de facto integration.
format	Journal Article
author	Alnashar, Sara B.
author_facet	Alnashar, Sara B.
author_sort	Alnashar, Sara B.
title	On Egypt's de facto Integration in the International Financial Market
title_short	On Egypt's de facto Integration in the International Financial Market
title_full	On Egypt's de facto Integration in the International Financial Market
title_fullStr	On Egypt's de facto Integration in the International Financial Market
title_full_unstemmed	On Egypt's de facto Integration in the International Financial Market
title_sort	on egypt's de facto integration in the international financial market
publisher	Taylor and Francis
publishDate	2015
url	http://hdl.handle.net/10986/23520
_version_	1764454076647473152

On Egypt's de facto Integration in the International Financial Market

Similar Items