The Impact of Capital Account Liberalization on Financial Stability in Algeria – A Benchmark Study for the Period (1990-2014)

Abstract

This study aims to test the impact of liberalization of the capital account of the balance of payments on financial stability in Algeria, This is by examining the relationship between the capital account and the internal and external balance indicators of the Algerian economy using annual statistical data for the period 1990-2014 as the year 1990 is the beginning of gradual liberalization of the capital account in Algeria. We used Pearson's correlation coefficient and Granger's causal test to determine the nature of the relationship between the variables of the study, The results showed that there was no strong correlation between the variables of the study and the interpretation that the financial stability achieved in the period from 2001 to 2014 was not the result of liberalization of the capital account, but due to high oil prices.