(جامعة الوادي - University of Eloued, 2024-01-23) Cheddad, Azzeddine; Mkidiche, Mohammed
The study explores the Central Bank of Algeria's management of interest rates
within an inflation targeting strategy. It analyzes the extended linear Taylor rule, which
incorporates the exchange rate and integrates forward-looking behavior to target expected
inflation. The generalized method of moments (GMM) is used for the analysis from Q1
2000 to Q4 2021. The findings suggest that the response of inflation is insufficient for
achieving stability, and the Algerian monetary policy is responsive to exchange rate
fluctuations. However, the "fear of floating" undermines the policy response.
