Journal of Business & Economic Policy

Factors Influencing Currency Convertibility in Economic Community of West African States (ECOWAS)
Muhammad Othman Lawan, Alhaji Bukar Mustapha, Mohammed Musa

Abstract
This purpose of this study is to examine factors influencing currency convertibility in West Africa. The study used panel co-integration method to analyze the data from 1982 to 2008. Co-integration relationships are observed between the macroeconomic fundamentals. The findings are: First, the countries are homogeneous enough to form a monetary union. Secondly, the findings show that misalignments within the band are usually allowed, even though the tests for convergence indicate that there is conditional convergence in the exchange rates. The study recommends that for effective currency convertibility in the region the frequent government intervention in exchange rates should be reduced.

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