The three current and two future member states of the East African Community (EAC) – Kenya, Uganda, Tanzania Burundi and Rwanda – have signed a memorandum of understanding on currency convertibility, reports Coast Week.
“The aim to reduce the cost of transactions for intra-EAC trade,” said Central of Bank of Kenya (CBK) Governor Njuguna Ndung’u.
Ndung’u is also the chairperson of the EAC Committee of Central Banks, says that the currency conversion agreement is central to the region moving forward as consortium of modernizing economies.
“It is part of the modernization efforts to enhance cross border payments across the trading bloc,” he said. “It is envisaged to facilitate cross border transactions, which are essential for boosting intra-regional trade and as a result the monetary and exchange rate policies have been progressively aligned.”
Currently the East African Payment System (EAPS) integrates the respective real time gross settlements systems of Kenya, Uganda and Tanzania, with Rwanda and Burundi slated for membership later in 2014.
Kenya’s EAC Ministry principal secretary Mwanamaki Mabruki is also very optimistic about the benefits full integration of the regional bloc of nations will bring.
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“It will offer opportunities for investor to access to over 140 million consumers,” he said.
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