The Tunisian exchange rate regime: Is it really floating?

Abstract While the Tunisian authority claims to adopt a floating exchange regime, the International Monetary Fund (IMF) classifies it as a rather crawl‐like regime. This paper aims at studying the Tunisian exchange rate regime over the post‐revolution period. It uses daily data from 2010 to 2019. The empirical results show that the Tunisian de facto regime is broadly consistent with the IMF classification. Nevertheless, the IMF stated that in 2018 the EUR is the only anchor, but this study shows that from 2017 the implicit weight of the USD becomes higher than the EUR. Most of the time, there is a discrepancy between the regime claimed by the Tunisian authority and the de facto regime detected by the model. Annual regressions, the Chow, and the Bai‐Perron breakpoint tests show that the Tunisian de facto regime is not stable.