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Monetary Integration In Eastern And Southern Africa: Choosing A Currency Peg For Comesa

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  • Carlos Vieira
  • Isabel Vieira

Abstract

African countries involved in monetary integration projects have been advised to peg their currencies against an external anchor before the definite fixing of exchange rates. In this study we estimate optimum currency area indices to determine, between four alternatives, which international currency would be the most suitable anchor for COMESA members and for a set of other selected African economies. We conclude that the euro and the British pound prevail over the US dollar or the yen; that the euro would be the best pegging for most, but not all, COMESA members; and that some of these economies display evidence of more intense integration with third countries, with which they share membership in other (overlapping) regional economic communities, than within COMESA.
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  • Carlos Vieira & Isabel Vieira, 2013. "Monetary Integration In Eastern And Southern Africa: Choosing A Currency Peg For Comesa," South African Journal of Economics, Economic Society of South Africa, vol. 81(3), pages 356-372, September.
    • Handle: RePEc:bla:sajeco:v:81:y:2013:i:3:p:356-372
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    File URL: http://hdl.handle.net/10.1111/saje.2013.81.issue-3
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    3. Mulatu F. Zehirun & Marthinus C. Breitenbach & Francis Kemegue, 2014. "Monetary Integration in SADC: Assessment of Policy Coordination and Real Effective Exchange Rate Stability," Working Papers 201473, University of Pretoria, Department of Economics.

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    More about this item

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations

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