Real and nominal effective exchange rates of African countries during 1971Q1--2012Q4

One of the macro variables that are included in most models is the exchange rate. Overall performance of a country's exchange rate is measured by changes in nominal or real effective exchange rate (REER). These rates are constructed and published mostly for industrial countries by international organizations. Less developed countries have received little attention. In this article, the two rates are constructed for 21 African countries using quarterly data over the period 1971Q1--2012Q4. As an application, we use the REERs to show that even in Africa the movements of the real effective rates follow a nonlinear path.