L’EFFET SEUIL DE L’ENDETTEMENT EXTERIEUR SUR LE TAUX DE CHANGE REEL DANS LES PAYS DE LA COMMUNAUTE ECONOMIQUE DES ETATS DE L’AFRIQUE DE L’OUEST (CEDEAO)

Abstract

This study analyzes the effect of external debt on the real exchange rate and determine the point of regime change when the debt settles at a given rate in ECOWAS countries. The quadratic approach estimated using least squares is used. The results reveal that the external debt has a negative and significant effect on the real exchange rate but when it is squared gives positive and significant effect on the real exchange rate. The relationship takes the form of a “U” curve. The minimum threshold found is 20.5%.