Abstract
Abstract Using the exchange rate as a nominal anchor is very successful for taking control of inflationary expectations. The countries in the MENA region switching to a more flexible exchange rate regime will mitigate the effects of external shock. Establishing Monetary Union emerges as an alternative of flexible exchange rate and inflation targeting preference for the MENA countries. As take in to account the whole findings, we cannot mention the existence of a co-ordination between all of MENA countries in terms of inflation, growth, monetary expansion and budget performance. Therefore we can say that monetary union is an inappropriate choice of exchange for countries of the region and MENA region has not complied with OCA criteria yet.
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