Monetary Policy in Unified Currency Areas: The Cases of the Cama and Ecca During 1976-90
January 1, 1994
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Summary
The paper compares the performance of monetary policy in the Central African Monetary Area (CAMA) and the Eastern Caribbean Currency Area (ECCA) during 1976-90. Their institutional setup and mechanism for monetary control are examined to explain the opposite trends in the net external position of their banking system during this period. It concludes that monetary policy in the ECCA succeeded by relying on active interest rate management aimed at stemming capital outflows and adhering to stringent rules aimed at limiting credit expansion. The passive policy stance in the CAMA contributed to a significant redistribution of the area’s money stock.
Subject: Bank credit, Banking, Credit, Domestic credit, International reserves, Monetary base, Monetary expansion, Monetary policy, Money
Keywords: Bank credit, banking system, BEAC credit, BEAC discount rate, BEAC statute, CAMA country, CAMA member, CAMA money stock, Caribbean, Credit, Domestic credit, ECCA relative, ECCA to the world market, exchange regime, financial market, Monetary base, Monetary expansion, money market rate, money stock, single currency, WP
Pages:
48
Volume:
1994
DOI:
Issue:
011
Series:
Working Paper No. 1994/011
Stock No:
WPIEA0111994
ISBN:
9781451926002
ISSN:
1018-5941
Notes
Compares the performance of monetary policy in the Central African Monetary Area (CAMA) and the Eastern Caribbean Currency Area (ECCA) during 1976-90.
