Measuring Financial Barriers Among East African Community Countries

August 1, 2010

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Format: Chicago

Yi David Wang. Measuring Financial Barriers Among East African Community Countries, (USA: International Monetary Fund, 2010) accessed November 21, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

This paper seeks to quantify existing financial barriers among East African Community (EAC) member countries based on analysis of each member country’s foreign exchange market. The primary contribution of this paper is the generation of an aggregate measure of financial barriers for the three relatively more advanced members (Kenya, Uganda, and Tanzania) using forward foreign exchange and interbank interest rate data. Its empirical results, which are corroborated by other evidence such as the levels of development of the financial markets and restrictions on capital flows, suggest that Kenya is the EAC’s most financially open country, followed by Uganda, and then Tanzania. The fact that the three countries exhibit different degrees of financial openness suggests that financial integration in the EAC region has a way to go.

Subject: Currencies, Currency markets, Financial markets, Financial services, Foreign exchange, Interbank rates, Interest rate parity, Money

Keywords: Currencies, Currency markets, Dollar, EAC country, EAC currency, EAC member, Exchange rate, Financial barrier, Financial integration, Foreign exchange, Foreign exchange market, Forward rates, Global, Interbank rates, Interest rate parity, Kenya shilling, Spot market, WP

Publication Details

Pages:

26
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2010/194
Stock No:

WPIEA2010194
ISBN:

9781455205240
ISSN:

1018-5941

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