期刊名称：International Journal of Economics and Finance Studies
电子版ISSN：1309-8055
出版年度：2017
卷号：9
期号：2
页码：32-47
出版社：Social Sciences Research Society
摘要：The SADC and EAC are working toward developing monetary unions in theirrespective regions in the near future. Trade openness of an economy is a crucialcharacteristic in assessing the feasibility of a monetary union and the adoption ofa common currency. Trade is usually regarded as the main channel through whichthe benefits from a common currency are enjoyed by member countries. Thepurpose of this paper is to analyse the feasibility of a monetary union in theSADC and the EAC through the analysis of trade openness within the twoeconomic regions. Descriptive and comparative analyses are employed to achievethe outcomes of the study. Results show that, in general, most of the SADCmember countries are open to external trade, meeting the requirement of theoptimum currency area (OCA) theory in this regard. This may mean that theystand to benefit from adopting a common currency in as far as trade openness isconcerned. However, the low intra-regional trade is expected to limit suchbenefits because most of the transactions are made with the rest of the world,using foreign currencies such as the US dollar and the euro. While the countries inthe EAC region have shown some progress in opening their economies in the last30 years, results show that none of them has attained the required criterion. Ourfindings suggest that the countries in the EAC region may not stand to benefitfrom adopting a common currency. Both economic regions need to significantly increase their intra-regional trade before the implementation of the envisaged monetary union..
