Policy rates in ECOWAS: are they fractionally cointegrated?

This study explores thestochastic properties and interconnections of central bank policy rates across ECOWAS countries using fractional integration and fractional cointegration techniques. We find that these rates exhibit persistent long-term relationships, with notable exceptions observed in Nigeria and the WAEMU countries due to differences in their monetary regimes. These insights are pivotal for informing the design of effective policies in anticipation of the proposed ECO currency within ECOWAS.