2 edition of common currency and exchange rate system for the West African monetary zone found in the catalog.
common currency and exchange rate system for the West African monetary zone
Edward E. Ghartey
Includes bibliographical references (p. 23-26).
|Statement||Edward E. Ghartey.|
|Series||IEA monograph,, no. 7, IEA monograph (Institute of Economic Affairs (Ghana)) ;, no. 7.|
|LC Classifications||HG1370 .G48 2005|
|The Physical Object|
|Pagination||35 p. :|
|Number of Pages||35|
|LC Control Number||2005326604|
The Economic Community of West African States, also known as ECOWAS, is a regional political and economic union of fifteen countries located in West tively, these countries comprise an area of 5,, km 2 (1,, sq mi), and in had an estimated population of over million.. The union was established on 28 May , with the signing of the Treaty of Lagos, with its Area: 5,, km² (1,, sq mi) (7th). The African Monetary Union (AMU) is the proposed creation of an economic and monetary union for the countries of the African Union, administered by the African Central a union would call for the creation of a new unified currency, similar to the euro; the hypothetical currency is sometimes referred to as the afro or afriq.. The Abuja Treaty, an international agreement signed on June.
Economic rationale of the exchange rate and monetary agreements concluded or endorsed by the Community: theoretical aspects 14 4. Formal exchange rate agreements with third countries or territories 17 The CFA franc zone 17 a) The CFA franc zone as two separate currency unions 18 b) The legal basis of the EC Council Decision 19File Size: 2MB. Negotiations for a single currency in West Africa began about 30 years ago. Since January , 19 countries in Europe have surrendered monetary sovereignty through the European Economic and Monetary Union. They use a currency called the Euro. The CFA Franc Zone in West Africa is a group of countries with a similar arrangement.
In addition to the change of name, the currency reform provides for two other changes. 50% of the BCEAO’s (Central Bank of West African States) foreign exchange reserves will no longer be deposited at the French Treasury, and France will no longer have . A second choice associated with a full monetary union is whether the region's common currency(ies) should have an external exchange rate anchor, such as a peg to the euro. An independent peg of each of the currencies to the euro would provide exchange rate stability within the region (as well as with the member euro area and with the.
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This paper investigates whether West African Monetary Zone (WAMZ) is a common currency area by using a structural VAR of real growth, real exchange rates and price level of five of the six countries in the West African Monetary Zone (WAMZ).Cited by: 6.
The common currency will be initially introduced in the member countries of the West African Monetary Zone (WAMZ). These countries include Ghana, Nigeria, Sierra Leone, Gambia, Guinea and Liberia africa_currencyand the Union Monetaire I’ovest Africaine (UMOA) countries made up of Benin, Togo, Cote d'Ivoire, Niger, Mauritania, Senegal, Burkina Faso, and Mali.
African Monetary Zone (WAMZ), is to have in place a common monetary and exchange rate policy by January, One crucial feature of the WAMZ is the adoption and. The need to maintain stability of exchange rate in the zone might also be related to the need to ensure stability in the national income of these countries because evidence has shown that WAMZ economy accounts for % of West Africa’s GDP and % of Africa’s GDP (ADF, ).
exchange rate variability that often impede trade flows amongst African countries (Yehoue, ). A deeper understanding of the extent of co-movement in exchange rates in the WAMZ will not only inform policy regarding the direction of the zone but also in the West African sub-region.
This study employs measures of variability and three GARCH models to comparatively explore the behaviour of exchange rate volatility of the currencies in the West African Monetary Zone.
The exchange rate system and the common monetary institutions have been credited with helping the zone for many years—especially in the s and s and again after the exchange rate adjustment of —to achieve lower inflation and more macroeconomic stability than other countries in sub-Saharan Africa.
The CFA arrangement has also been. integration, and exchange rate policy. • Corden () distinguishes, in this regard, between pseudo-exchange rate unions,”and “complete exchange rate unions.” • Establishment of single currency usually results from achievement of full monetary union.
• Single currency regime is an extreme case of fixed exchange rate Size: KB. output. The lower exchange rate risk for countries that share a common currency can also engender positive shocks to output.
In this context, the level 3. CFAZ consists of two separate regional currency and economic unions in Sub-Saharan Africa: 1. West African Economic and Monetary Union (WAEMU) and 2.
Central African Economic and Monetary. The goal of a common currency, first in West African Monetary Institute(WAMI)/West African Monetary Zone(WAMZ) countries – The Gambia Ghana, Guinea-Conakry (which is French speaking but does not use the CFA franc), Liberia, Nigeria and Sierra Leone – and later in the whole ECOWAS area, was officially stated in December in connection with the formal launch of WAMZ.
Currently, debt-to-GDP is a staggering per cent in Gambia and the ratio is much higher than 20 per cent in all ECOWAS countries.
Although ECOWAS provides scenarios that allow for gradual integration as countries meet the criteria, it is almost impossible for the currency union to.
A single currency could help address West Africa's monetary problems, such as the lack of independence of central banks and non-convertibility of some : Tahiru Azaaviele Liedong. The West African Monetary Institute (WAMI/Institute) was set up in Accra, Ghana, in January and began operations in March The Institute is to undertake technical preparations for the establishment of a common West African Central Bank and the launching of a single currency for the West African Monetary Zone (WAMZ/Zone).
Constraints of the International Monetary System 5. The monetary problems facing West African countries and developing countries in general, are mainly attributable to the current international monetary system which does not effectively guarantee a reasonable multilateral exchange rates system.
The monetary policies pursued by major industrialisedFile Size: KB. To achieve the ultimate objective of a single currency, member countries are required to implement a number of measures including: adoption of a market based exchange rate system. At present, 15 West African countries use the CFA as their common currency.
The West African Monetary Union (WAMU) is distinguished by the recognition of a common monetary unit, the Franc of the African financial community, or CFA Franc, which is issued by the BCEAO. WAMU currently comprises: Benin, Burkina Faso, Côte-d’Ivoire, Guinea-Bissau, Mali, Niger, Senegal and Togo.
Talia (),Lovegrove (), Battéy et al. () studied exchange rate integration. However, none have used their findings as the basis for single currency adoption. Overview of Stock Markets in West African Monetary Zone It is estimated that there are 29 stock exchanges representing 38 countries in the 52 countries in Africa (ASEA, ).
Once this new currency union had proved functional and valuable for its members, it would be much easier to convince those using the CFA franc to join their West African partners. After all, the France-backed currency, which is currently pegged to the euro, offers significant advantages, including exchange-rate stability and lower interest rates.
The Common Monetary Area links South Africa, Namibia, Lesotho and Eswatini into a monetary union. It is allied to the Southern African Customs Union.
The main purpose of this trade is that all of the parties can have the same development and equitable economic advance so they can be treated as a whole. Although the South African rand is legal tender in all states, the other member states issue.
The West African Monetary Zone (WAMZ) is a monetary and customs union with a common currency, the CFA Franc. Initially, they propose the introduction of the Single Currency in Finally, they agreed to launch the new single currency in. This text analyses the benefits and costs of currency unions, focusing on the West African Monetary Zone (WAMZ).
Openness, co-movement, and labor mobility are explored for each country using econometric techniques to determine the optimum currency area (OCA) : Tamsir Cham.The ISO currency codes are XAF for the Central African CFA franc and XOF for the West African CFA franc.
Evaluation [ edit ] The currency has been criticized for making economic planning for the developing countries of French West Africa all but impossible since the CFA's value is pegged to the euro (whose monetary policy is set by the European.
The West African Monetary Zone is to be created in July and is to lead in to a merger with the West African part of the CFA franc zone to produce a single currency for the Economic.