Governors said that the EAC economies did not experience severe first round effects of the global financial crisis.

The establishment of the East African Community (EAC) Monetary Union is on course, the Governor of the National Bank of Rwanda has said.

François Kanimba, said this while addressing his counterparts during the recently held Twelfth Meeting of the EAC Monetary Affairs Committee (MAC) held at Kigali Serena Hotel, that a consultant to undertake a comprehensive study on the proposed initiative had been identified.

This follows a presentation on the progress in preparing the ground for the establishment of the Monetary Union in the region by experts.

After the presentation, Kanimba said: "Our role today is to consider the report of our experts articulated on various on-going activities related to the financial integration process of the East African Community.”

Some of the financial integration activities include; macroeconomic convergence, monetary policy, legal and regulatory framework for banking supervision, development of financial markets and payment systems in the EAC partner states.

In response, the governors agreed that a durable Monetary Union depends on achieving macroeconomic convergence with regard to price stability, sound fiscal and monetary policies, and exchange rate stability.

They also noted that, the rising inflation rates, widening budget and current account deficits, falling export prices and high interest rate spreads continued to be the major challenges facing the EAC countries.

Other challenges highlighted include, availability of accurate, reliable, comparable and timely statistics.

"This might impede the progress made in achieving targets outlined in the EAC macroeconomic convergence,” the communiqué reads.

However, they commended the EAC Secretariat for the funding and contracting the services of the European Central Bank to undertake the study. They promised their commitment and support to ensure that the study is concluded in time.

On the impact of the global financial crisis, it was noted that the EAC economies did not experience severe first round effects of the global financial crisis.

The regional governors however, observed that the EAC partner states are not immune to global events in general, as their economies are currently suffering from second and third round effects, notably decline in export demand, slowdown in remittances, and decline in foreign aid to government.

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