The Algerian Bank′s Sterilization Policy and the Sustainability Problematic: Roberto Frenkel′s Scenarios (2005-2015)

This paper mainly aims to explore the reality behind the continued implementation of the sterilization policy by Algerian bank for a long time without concerns about growing costs. For this purpose, we try to simulate Roberto Frankel’s model scenarios using annual data covering the period 2005-2015. Our findings showed that the sterilization policy is so far sustainable given to three main sub-results, namely the domestic interest rate at a low-level (less than 2%) which certainly guarantees the sustainability condition, a large room for the monetary autonomy (ranged between 16 and 28%), and a positive quasi-fiscal result for the whole period.