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Monetary integration in Eastern and Southern Africa: choosing a currency peg for COMESA

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  • Carlos Vieira

    () (CEFAGE-UÉ, Universidade de Évora, Portugal)

  • Isabel Vieira

    () (CEFAGE-UÉ, Universidade de Évora, Portugal)

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.

Suggested Citation

  • Carlos Vieira & Isabel Vieira, 2012. "Monetary integration in Eastern and Southern Africa: choosing a currency peg for COMESA," CEFAGE-UE Working Papers 2012_03, University of Evora, CEFAGE-UE (Portugal).
  • Handle: RePEc:cfe:wpcefa:2012_03
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    References listed on IDEAS

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    1. repec:pje:journl:articlev is not listed on IDEAS
    2. Kamal, Mona, 2015. "Egypt Relative to the COMESA’s Member States: Do Fiscal Policy Rules Matter?," MPRA Paper 67101, University Library of Munich, Germany.
    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.

    More about this item

    Keywords

    Optimum currency areas; Monetarry anchor; Currency pegs; African regional economic communities; African monetary integration.;

    JEL classification:

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

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