As you are aware, the vision of the Monetary Affairs Committee (MAC) of the East African Community is to have a Monetary Union as a precursor to a political federation. Full implementation of the EAC convergence criteria and finalisation of harmonisation cannot be done without sufficient empirical studies to support our decisions.
Furthermore, the process of setting wages is to some extent backward-looking in a number of euro area countries, reflecting formal and informal indexation mechanisms.4 Additionally, the timing of wage negotiations plays a role in postponing the point in time when growing confidence that inflation is approaching the ECB’s intended medium-term level starts to become more visible in aggregate wage figures.