Modeling Algeria’s Foreign Exchange Reserves With Arima: Trends And Policy Implications

Authors

  • MOHAMMED OUAMER University of Algiers 03

Keywords:

ARIMA, Foreign Exchange Reserve, Forecasting, Algeria

Abstract

Given the critical importance of FER in ensuring monetary stability and guiding policy decisions, accurate forecasting is essential for effective economic management. This article explores the role of Foreign Exchange Reserves (FER) in the Algerian economy by employing the ARIMA model to forecast future reserve levels. The study uses monthly in order to build and validate the ARIMA model, providing a detailed analysis of the trends and dynamics in Algeria’s FER. The forecasts generated cover the period from September 2023 to December 2023, indicating a slight downward trend in reserve levels. While the actual FER for September closely aligns with the forecasted value, with a relative error of just 1.01%, the forecast’s accuracy could be affected by unforeseen economic events or policy shifts. These findings offer valuable insights for policymakers, emphasizing the need for a forward-looking approach to reserve management and monetary policy in Algeria.

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Published

12/31/2024

Issue

Vol. 9 No. 02 (2024)

Section

Articles

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