East African Monetary Institute and East African Central Bank to be formed

The regional economic experts from East African countries have agreed on the establishment of the East African monetary institute to enhance cooperation between national central banks of the partner states with a view of establishing the conditions necessary for the realization of the monetary union. The institute is also expected to promote the smooth functioning of the market infrastructure for the payments and financial instrument in view of monetary union as well as taking measures for design and production of the banknotes and coins for future single currency. Rwandan Olivier Kamanzi Director Capital Market Advisory Council (CMAC) while attending a workshop in Kampala, told The New Times that market integration and economic convergence will guide the establishment of the east African monetary union. He added that partner states needs to consult widely on the study report and the draft protocol on EA Monetary Union. He said that all instruments for the establishment of the EAC Monetary Union be negotiated at once in the course of negotiating the monetary union protocol. Participants said that the East African Monetary Institute be formed expeditiously using a bill that would be presented to the council or the legislative assembly. However partners also agreed to the establishment of East African Commercial Bank which will define monetary and exchange rate policy of the single currency as well as holding managing and controlling foreign reserve of the partner states. This regional central bank shall be obligated to achieve and maintain price stability in the east African community monetary union established by the protocol. Thomas Kigabo a Chief Economist in National Bank of Rwanda commended the establishment of one currency as a milestone in the development of Rwandan economy. “I absolutely believe that our economy will continue booming since our business practitioners will transact using one currency instead of delaying on foreign boarders exchanging money,” he said. The workshop also recommended that public awareness campaign should be put in place to promote acceptability of the monetary union by the general public. They also urged the EAC secretariat to convene a joint meeting of monetary affairs committee, fiscal affairs, capital market insurance and pensions committee and statistics by the end of February this year to consider the report. Ends