Re:African leaders launch landmark 55-nation trade zone
by repolfx on Monday July 08, 2019 @07:46AM
(#20381891)
They can inflate their currencies just by printing more of it. Currently that sort of quantitive easing is restricted to the specific country that does it. A future African Union would make the EU look like a pillar of stability in comparison - stronger countries like Kenya, South Africa would want more stable lower inflation currencies and basket cases would want to run the mint at full speed.
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Re:African leaders launch landmark 55-nation trade zone
by dalbasal on Monday July 08, 2019 @08:14AM
(#20382044)
Yup, but in all cases the currency will be responsive to the aggregate economy, not the local economy.
I'm not very knowledgeable about African economics, but that said, I think that the downsides to a common currency experienced by Greece will be a much smaller issue in Africa, because stability is more important than monetary policy tools and "natural" inflation during debt crisis. The monetary solutions (market and/or policy solutions) just aren't available to most of the smaller African economies anyway. OTOH, currency stability is a problem and common currency generally helps with this.