Nominal and real effective exchange rates for Southern African Development Community countries over the period 1980–2004: implications for the expansion of the Common Monetary Area

Figures & data

Figure 1: Comparison of the NER between CMA countries and each non-CMA SADC country

Table 1: Comparison of relative range and standard deviations

NER range	%	NER standard deviation	%
CMA = 0.418	100	CMA = 0.073	100.0
Seychelles	53	Botswana	98.0
Botswana	83	Seychelles	137.7
Mauritius	133	Zambia	267.0
Malawi	460	Mauritius	349.0
Tanzania	485	Angola	382.0
Mozambique	584	Malawi	383.0
Zambia	904	Zimbabwe	384.9
Zimbabwe	958	Tanzania	418.9
Angola	2238	DRC	544.0
DRC	3342	Mozambique	815.0
Source: Authors' calculations on basis of the NER indices.

Table 2: Cointegration of the CMA NER and non-CMA countries' NER

Countries	Test statistics	Critical values
		1%	5%	10%	Cointegration
Angola	–1.949	–0.2600	–1.950	–1.610	*
Botswana	–3.363	–3.511	–2.891	–2.580	**
DRC	–1.757	–0.2600	–1.950	–1.610	*
Malawi	–3.155	–3.511	–2.891	–2.580	**
Mauritius	–1.414	–0.2600	–1.950	–1.610	****
Mozambique	–1.488	–0.2600	–1.950	–1.610	****
Seychelles	–1.044	–0.2600	–1.950	–1.610	****
Tanzania	–1.275	–0.2600	–1.950	–1.610	****
Zambia	–1.635	–0.2600	–1.950	–1.610	*
Zimbabwe	–0.649	–0.2600	–1.950	–1.610	****
*Cointegration at 10% significance level only. **Cointegration at 5% and 10% significance levels. ***Cointegration at 1%, 5% and 10% significance levels. ****No cointegration at all.
Source: Authors' calculation from NER indices.

Figure 2: Real exchange rate and relative price movements over the period 1980–2004

Table 3: Comparison of the range and standard deviations of RER and relative prices for the CMA and each non-CMA country

Range				Standard deviation
RER	%	Relative prices	%	RER	%	Relative prices	%
CMA = 0.036	100	CMA = 0.380	100	CMA = 0.073	100	CMA = 0.119	100
Botswana	542.7	Botswana	35.3	Botswana	98.2	Botswana	34.6
Seychelles	614.9	Mauritius	–66.0	Seychelles	138.7	Mauritius	81.7
Zambia	1019.2	Seychelles	–117.9	Zambia	267.0	Seychelles	135.4
Mozambique	1106*	Mozambique	–149.3	Mauritius	348.9	Malawi	339.5
Tanzania	1319	Malawi	242.1	Angola	382	Mozambique	412.3
Mauritius	2137	Tanzania	409.1	Malawi	383.2	Tanzania	445.3
Malawi	2739	Zimbabwe	788.6	Zimbabwe	384.9	Zimbabwe	642.1
Zimbabwe	2746	Zambia	896.8	Tanzania	418.9	Zambia	1050.8
DRC	3143.8	Angola	2196.3	DRC	544.7	Angola	2833.5
Angola	1103.2	DRC	3374.7	Mozambique	815.2	DRC	4232.4
*Mozambique series available only for the period 1990–2004.
Source: Authors' calculations on the basis of the indices.

Table 4: Incremental and average covariance (cost) to joining the CMA

Real exchange rate			Relative prices
Country	Incremental	Average	Country	Incremental	Average
Lesotho	0.096	0.096	Lesotho	0.096	0.096
Namibia	0.114	0.105	Namibia	0.098	0.097
South Africa	0.025	0.078	South Africa	0.025	0.073
Swaziland	0.108	0.085	Swaziland	0.102	0.080
CMA	0.343	0.085	CMA	0.401	0.080
Mauritius	0.003	0.069	Mauritius	0.003	0.067
Seychelles	0.005	0.058	Seychelles	0.006	0.059
Botswana	0.083	0.062	Botswana	0.083	0.062
Zimbabwe	0.087	0.065	Zimbabwe	0.087	0.064
Tanzania	0.091	0.068	Tanzania	0.091	0.067
Malawi	0.135	0.074	Malawi	0.114	0.071
Zambia	0.137	0.080	Zambia	0.137	0.077
Mozambique	0.314	0.099	Mozambique	0.283	0.093
Angola	0.314	0.115	Angola	0.314	0.109
DRC	0.414	0.136	DRC	0.414	0.129
Source: Authors' calculations from the RER and relative price indices.

Table A1: Order of integration of series used in the analysis

Countries	NER	Relative prices	RER
CMA	I(1)	I(1)	I(1)
Angola	I(1)	I(2)	I(1)
Botswana	I(1)	I(1)	I(1)
DRC	I(1)	I(2)	I(2)
Malawi	I(1)	I(1)	I(1)
Mauritius	I(1)	I(1)	I(1)
Mozambique	I(1)	I(2)	I(2)
Seychelles	I(1)	I(1)	I(1)
Tanzania	I(1)	I(1)	I(1)
Zambia	I(1)	I(1)	I(1)
Zimbabwe	I(1)	I(2)	I(1)
Source: Authors' calculations.

INTERNATIONAL MONETARY FUND (IMF) . 1980–2004a . International financial statistics , Washington, DC : IMF . various volumes

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