Accra, Sept. 8, GNA - National currencies would circulate alongside the ECO, the common currency of West Africa Monetary Zone (WAMZ) when it is introduced in June 2005, Dr Michael Ojo, Director-General of the West African Monetary Institute (WAMI), said on Monday.
Speaking in an interview with the Ghana News Agency, he said existing currencies of member countries would be given a reasonable period to be phased out.
It would facilitate dual pricing policy during the transition to the common currency, he said.
"This will serve as a standard of measurement to allow economic agents to place value on goods and services and ultimately enable the public to get used to the new concept," Dr Ojo said.
He explained that the ECO Unit of Account would be an artificial basket of currencies, used by members of the WAMZ as their internal accounting unit.
"This unit will be the precursor of ECO and will allow economic agents to get acquainted to the new measurement concept before the new common currency is introduced and will lead to a smooth transition."
He said that WAMI is designing an Exchange Rate Mechanism to deal with the setting of exchange rate parities between currencies of the zone and an anchor currency, as well as margins of fluctuations that would be acceptable to keep macroeconomic conditions stable in the zone. This will ensure that participating member states re-orient their policies towards stability, foster convergence and prepare them towards the adoption of a common currency.
