The benefits that Cabo Verde (Cape Verde) derives from the fixed-rate regime of the Cape Verdean escudo against the euro means it is not worth joining the single currency of the Economic Community of West African States (ECOWAS), the governor of the Bank of Cabo Verde said on Friday in Praia.
“Cabo Verde has a credible currency, which fulfills the functions of value reserve and means of exchange, which inspires confidence and has allowed the country to take the leap it did, so it does not make sense to change it,” said João Serra, on the sidelines of the opening of an International Conference commemorating 20 years since the signing of the Foreign Exchange Cooperation Agreement between Portugal and Cabo Verde.
Cited by Cape Verdean news agency Inforpress, the governor said that given the characteristics of the Cape Verdean economy, almost exclusively focused on Europe, the country will have no advantage in joining the African single currency.
“We have almost no economic relations with Africa, either with ECOWAS or with the continent as a whole, so we are technically arguing that Cabo Verde’s accession to ECOWAS’s single currency is not worth it, it will not bring benefits that might eventually supplant those we now have with the fixed regime against the euro,” he said.
Serra also explained that the replacement of the Cabo Verde escudo by the euro is also an issue that is not on the table.
“What is happening is the parallel circulation of the Cape Verdean escudo with other currencies, as long as they are accepted,” he said, adding that, with the approval of the law of liberalisation of capital movements, informal double circulation is no longer unlawful. (macauhub)