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Financial Integration In The Common Monetary Area

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  • HANNAH NIELSEN
  • EBSON UANGUTA
  • SYLVANUS IKHIDE

Abstract

This paper assesses the level of financial integration within the CMA countries, using the concept of the uncovered interest rate parity. The impact of foreign interest rates on the domestic interest rates, in this case the South African rates on the rates of the LNS countries, is analysed. For comparative purposes, other neighbouring countries such as Botswana, Zambia and Zimbabwe are brought into the analysis. The results from the uncovered interest rate parity approach show that Lesotho, Namibia and Swaziland can be considered to be well financially integrated with the South African market, while for Botswana, Zambia and Zimbabwe it shows the contrary.

Suggested Citation

  • Hannah Nielsen & Ebson Uanguta & Sylvanus Ikhide, 2005. "Financial Integration In The Common Monetary Area," South African Journal of Economics, Economic Society of South Africa, vol. 73(4), pages 710-721, December.
    • Handle: RePEc:bla:sajeco:v:73:y:2005:i:4:p:710-721
    DOI: 10.1111/j.1813-6982.2005.00048.x
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    References listed on IDEAS

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    1. Baele, Lieven & Ferrando, Annalisa & Hördahl, Peter & Krylova, Elizaveta & Monnet, Cyril, 2004. "Measuring financial integration in the euro area," Occasional Paper Series 14, European Central Bank.
    2. Lieven Baele & Annalisa Ferrando & Peter Hördahl & Elizaveta Krylova & Cyril Monnet, 2004. "Measuring financial integration in the euro area," Occasional Paper Series 14, European Central Bank.
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    Cited by:

    1. EPHREM HABTEMICHAEL REDDA & Paul-Francious Muzindusti, 2017. "Does SADC constitute an optimum currency area? Evidence from generalised purchasing power parity," Proceedings of Economics and Finance Conferences 4807771, International Institute of Social and Economic Sciences.
    2. Meshach Jesse Aziakpono, 2008. "Financial And Monetary Autonomy And Interdependence Between South Africa And The Other Sacu Countries," South African Journal of Economics, Economic Society of South Africa, vol. 76(2), pages 189-211, June.
    3. Ms. Iyabo Masha & Mr. Leighton S Harris & Mr. Jian-Ye Wang & Ms. Kazuko Shirono, 2007. "The Common Monetary Area in Southern Africa: Shocks, Adjustment, and Policy Challenges," IMF Working Papers 2007/158, International Monetary Fund.
    4. Theron Shumba & Sophia Mukorera, 2023. "Monetary Policy Implications on Macroeconomic Performance in the Common Monetary Area: A Panel-SVAR Framework," Economies, MDPI, vol. 11(5), pages 1-18, May.

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