Excess Liquidity and Effectiveness of Monetary Policy : Evidence from Sub-Saharan Africa / Magnus Saxegaard.

Format:

Book

Government document

Author/Creator:

Saxegaard, Magnus.

Contributor:

International Monetary Fund. African Department.

Series:

IMF Working Papers; Working Paper ; No. 2006/115

IMF Working Papers

Language:

English

Subjects (All):

Monetary policy--Africa, Sub-Saharan--Econometric models.

Monetary policy.

Liquidity (Economics)--Econometric models.

Liquidity (Economics).

Physical Description:

1 online resource (52 p.)

Edition:

1st ed.

Place of Publication:

Washington, D.C. : International Monetary Fund, 2006.

Language Note:

English

Summary:

This paper examines the pattern of excess liquidity in sub-Saharan Africa and its consequences for the effectiveness of monetary policy. The paper argues that understanding the consequences of excess liquidity requires quantifying the extent to which commercial bank holdings of excess liquidity exceed levels required for precautionary purposes. It proposes a methodology for measuring this quantity and uses it to estimate a nonlinear structural VAR model for the CEMAC region, Nigeria and Uganda. The study suggests that excess liquidity weakens the monetary policy transmission mechanism and thus the ability of monetary authorities to influence demand conditions in the economy.

Contents:

""Contents""; ""I. INTRODUCTION""; ""II. SOME STYLIZED FACTS ON RESERVE REQUIREMENTS AND EXCESS LIQUIDITY IN AFRICAN COUNTRIES""; ""III. MEASUREMENT OF EXCESS LIQUIDITY""; ""IV. EXCESS BANK LIQUIDITY AND MONETARY POLICY TRANSMISSION MECHANISM""; ""V. SUMMARY AND POLICY IMPLICATIONS""; ""References""

Notes:

"May 2006."

Includes bibliographical references.

Description based on print version record.

ISBN:

9786613826398

9781462336692

1462336698

9781452783444

1452783446

9781283513944

1283513943

9781451909098

1451909098

OCLC:

449992447