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An Assessment of the Degree of South Africa's Financial Integration into the World Economy

Author

Listed:
  • Lumengo Bonga-Bonga

    (University of Johannesburg)

Abstract

This paper assesses the degree of financial integration between South Africa and the United States of America to infer South African’s financial integration into the world economy. The analysis is based on the covered interest parity whereby the mean reverting property of the covered interest differential, and the long-run equilibrium of the variables that constitute the covered interest parity, are examined. The paper finds that covered interest difference is mean reverting and its absolute mean decreases progressively during different periods of the analysis. This finding supports an increasing degree of South Africa’s financial integration into the world economy from 1993 to 2008.

Suggested Citation

  • Lumengo Bonga-Bonga, 2009. "An Assessment of the Degree of South Africa's Financial Integration into the World Economy," The African Finance Journal, Africagrowth Institute, vol. 11(2), pages 67-79.
    • Handle: RePEc:afj:journl:v:11:y:2009:i:2:p:67-79
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    File URL: http://www.journals.co.za/ej/ejour_finj.html
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    Cited by:

    1. Bonga-Bonga, Lumengo, 2018. "Uncovering equity market contagion among BRICS countries: An application of the multivariate GARCH model," The Quarterly Review of Economics and Finance, Elsevier, vol. 67(C), pages 36-44.
    2. Haakon Kavli & Kevin Kotzé, 2014. "Spillovers in Exchange Rates and the Effects of Global Shocks on Emerging Market Currencies," South African Journal of Economics, Economic Society of South Africa, vol. 82(2), pages 209-238, June.

    More about this item

    JEL classification:

    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)

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