Economic Restrictions and Currency Performance: Evidence of African Countries

Abstract

This study explores the impact of diverse economic restrictions on currency performance. We assess a panel dataset of 30 African countries for the period 1990–2010. Our empirical evidence is based on the fixed effect regression and the Quantile regression approach. We find that the United States, European Union, economic and intensity sanctions weaken the real exchange rates. However, we establish that the U.N. sanctions are insignificant. As for the policy implication, sanctioned countries should implement a policy that could mitigate the adverse consequences of economic restrictions on currency performance.