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The Importance of Coordination Between Fiscal and Monetary Policy to Ensure Macroeconomic Stability and enhance regional integration emphasized .

The COMESA Monetary Institute (CMI) held a validation workshop for studies conducted by Member Central Banks on ““Effects of Fiscal Policy on the Conduct and Transmission Mechanism of Monetary Policy in Selected COMESA Member Countries” from 19th to 20th October, 2015. The workshop was held based on the decision of the COMESA Committee of Governors of Central Banks during their 20th Meeting which was held in Kinshasa, DR Congo in November 2014 that directed the COMESA Monetary Institute (CMI) to conduct the study.

The studies focused on identifying key challenges of implementing monetary and fiscal policies in member countries and to provide recommendations to ensure the effectiveness of fiscal and monetary policy coordination based on best international practices. The key recommendations of the workshop among others were the following:

  1. Price stability to be enshrined in a law as primary objective of the Central Banks;
  2. Curtail fiscal dominance to contain uncertainties in the conduct of monetary policy;
  3. Developing a robust financial market infrastructure to support the functioning of financial markets and monetary operations:
  4. Capacity building on liquidity forecasting and macromodelling;
  5. Implementation of robust Public Finance Management Frameworks within comprehensive Medium Term Fiscal, Budget and Expenditure frameworks; and
  6. Implementation of the COMESA Multilateral Fiscal surveillance Framework

The proceeding of the workshop will be published as CMI knowledge product very soon.

The COMESA Monetary and Exchange Rate Sub-Committee meeting was also held back to back with the Workshop. The meeting considered the status of implementation of its work plan for 2015 and prepared the work plan for 2016, in readiness to Governors meeting scheduled for November, 2015.

The workshop and meeting were attended by delegates from the Central Banks of Burundi, Egypt, Kenya, Malawi, Mauritius, Rwanda, Swaziland, Sudan, Uganda, Zambia, and Zimbabwe.

In closing the workshop, Mr. Ibrahim Zeidy, Director of the COMESA Monetary Institute underscored that the studies addressed daunting challenges in macroeconomic management in the region and will significantly contribute to policy advice that will ensure macroeconomic stability in member countries, and hence achievement of macroeconomic convergence in COMESA region.

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