The proposal to raise the exchange rate to 160 gourdes per dollar raises a legitimate economic question: high inflation in Haiti, combined with the relative stability of the nominal exchange rate, has contributed to a real appreciation of the gourde.
The proposal to set the exchange rate at 160 gourdes per dollar raises a legitimate economic question: high inflation in Haiti, combined with the relative stability of the nominal exchange rate, has contributed to a real appreciation of the gourde. However, recognizing this misalignment is not enough to prove that a rate of 160 gourdes per dollar is the right one, nor that such a depreciation would immediately lead to a drop in inflation. The challenge is to determine what adjustment would restore competitiveness while limiting its effects on prices and purchasing power.
A diagnosis worth taking seriously
In an article published on August 10, 2026, in Le Nouvelliste, economist Pierre-Marie Boisson suggests adjusting the exchange rate to 160 gourdes per dollar. He believes that keeping it around 130 gourdes particularly penalizes recipients of transfers, farmers, and exporters.The diagnosis is economically sound. When inflation rises faster in Haiti than with its trading partners while the nominal exchange rate remains relatively stable, the gourde appreciates in real terms. The IMF has actually highlighted this recent appreciation of the real exchange rate. This can reduce the competitiveness of exporters and local producers facing competition from imports.
The effect on remittances is also undeniable. 100 dollars provide 13,000 gourdes at a rate of 130, versus 16,000 at a rate of 160. But the key question is really: by how much will the recipient’s real purchasing power increase after adjusting for prices?Winners, but also losers
Moving from 130 to 160 gourdes, which is about a 23% increase in the dollar price, would make an imported product priced at 100 dollars go from 13,000 to 16,000 gourdes. Transfer recipients would get more gourdes, but imports would become more expensive, posing a risk to purchasing power.
In an economy that depends on food imports, a depreciation can indeed make these imports more costly and limit households’ access to food. So, the effect of moving to 160 gourdes should be considered beyond just competitiveness gains and transfers.Pass-through and inflation: an essential distinction
This question refers to exchange rate pass-through, that is, the transmission of an exchange rate change to domestic prices.
For Haiti, this mechanism is important. Bhattacharya and Shenai (4) estimate a pass-through coefficient of around 0.45 for 1995-2021 and 0.64 for 2009-2021. Another IMF estimate (5) puts it at about 0.30 for the consumer price index. Estimates vary depending on the models and periods, but they converge on one point: a depreciation of the gourde puts upward pressure on prices.
So the claim that the adjustment would “immediately curb inflation” should be taken with a grain of salt. All else being equal, a depreciation first makes imports more expensive and puts inflationary pressure on prices.
A restrictive fiscal and monetary policy can offset this effect. But we need to distinguish the mechanisms: 1) a depreciation leads to initial inflationary pressure; and 2) monetary and fiscal discipline leads to disinflationary pressure. So it’s not necessarily the depreciation itself that reduces inflation.
A budget surplus isn’t automatic
The proposal also suggests that the increase in income linked to the change in parity could generate a budget surplus, allowing for a reduction in the money supply. That’s possible, but not automatic. In fact, a depreciation can increase certain public revenues in gourdes, especially those related to imports, but it also raises certain expenses like fuel, equipment, medicines, services, and obligations denominated in foreign currency.So we’d need to show that revenue growth is outpacing spending before concluding that a surplus is emerging.
Why exactly 160 gourdes?
That’s probably the fundamental empirical question. Noticing a real overvaluation doesn’t automatically tell you the equilibrium nominal exchange rate. That would need to be estimated by taking into account things like the inflation differential, the real effective exchange rate, the current account, international reserves, remittances, productivity, and terms of trade.
Without an explicit model, 160 gourdes could be an interesting assumption to test, but it’s not necessarily a scientifically established equilibrium rate.The 1994 CFA experience and a comparison to put into perspective
The devaluation of the CFA franc in 1994 is a relevant example of correcting a real overvaluation. But it doesn’t show that a devaluation immediately leads to low inflation.
In Côte d’Ivoire, inflation actually reached about 32% in 1994 after the devaluation. The IMF notably attributes this initial rise to the pass-through to prices of tradable goods. Inflation then slowed down significantly, but IMF analyses highlight the major role of macroeconomic and adjustment policies in this disinflation.
So, the CFA experience rather illustrates a sequence where devaluation initially causes an inflationary spike, before the implementation of adjustment policies contributes to disinflation and improved competitiveness.
The CFA experience doesn’t allow us to establish an automatic and direct relationship between devaluation and low inflation.From the figure of 160 to a real research question
So the diagnosis should be distinguished from the prescription. There are serious reasons to think that the gourde has appreciated in real terms. But noticing this appreciation is not enough to prove that 160 gourdes is the appropriate rate.
The central question is rather: by how much is the gourde really overvalued, and what exchange rate would correct this misalignment without causing excessive inflation costs?To answer this, an empirical study could first estimate an equilibrium exchange rate based on the fundamentals of the Haitian economy, including inflation and productivity differentials, terms of trade, diaspora transfers, external position, and international reserves. The gap between this equilibrium rate and the observed rate would allow for estimating how overvalued the gourde is and, above all, establishing a range of economically justifiable exchange rates.Secondly, different adjustment scenarios could be simulated to measure their effects on inflation, purchasing power, and competitiveness.
So it’s not about showing in advance that 160 gourdes is too high or too low, but about estimating the rate that aligns with the fundamentals of the economy and evaluating its consequences. The issue of real appreciation deserves to be addressed; the rate that would correct it, however, deserves to be demonstrated empirically.
