Regional Integration, Development, and Governance in Mesoamerica by Alina Gamboa

Author:Alina Gamboa
Language: eng
Format: epub, pdf
ISBN: 9783030253509
Publisher: Springer International Publishing

The CMCA’s goals in its 2007–2011 mandate were: “to encourage coordination, harmonisation, and convergence in monetary, exchange and financial policies of the member countries; to promote a single financial space in the whole region” (CMC 2006: 2).20 The 2006–2009 Minister explained the reason for postponing the common currency, as the focus of the CMC shifted to more imminent matters of macroeconomic stability, reducing inflation, and monetary stability. In recent history, inflation rates remain under 10% in most Central American Countries, as opposed to the 80s and early 90s, where spiralling hyperinflation could reach over 200% (Interview 6: 2006). Another member of the Ministry indicated that there were additional reasons for the monetary union to lose its priority to the creation of a single financial space:…there are technical reasons why monetary union has been postponed, because to form an optimal monetary zone we first have to have a customs union, one where there is complete mobility of the factors of production, and we are not there yet. There are some advances, but the customs union has been postponed and without free mobility, in the academic sense of the word, the factors of production, company movement, people, it hasn’t happened, and until it does, then we cannot think of homogenising exchange rates and adopt a single currency. (Interview 4: 2006)

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