scholarly journals Monetary Policy Changes and Inflationary Pressure in Nigeria

Economy ◽  
2020 ◽  
Vol 7 (1) ◽  
pp. 78-86
Author(s):  
Isiwu George Duhu ◽  
Azike Lawrence Chike ◽  
Ngwu Jerome Chukwuemeka
2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Van Dan Dang ◽  
Khac Quoc Bao Nguyen

PurposeThe study explores how banks design their financial structure and asset portfolio in response to monetary policy changes.Design/methodology/approachThe authors conduct the research design for the Vietnamese banking market during 2007–2018. To ensure robust findings, the authors employ two econometric models of static and dynamic panels, multiple monetary policy indicators and alternative measures of bank leverage and liquidity.FindingsBanks respond to monetary expansion by raising their financial leverage on the liability side and cutting their liquidity positions on the asset side. Further analysis suggests that larger banks' financial leverage is more responsive to monetary policy changes, while smaller banks strengthen the potency of monetary policy transmission toward bank liquidity. Additionally, the authors document that lower interest rates induce a beneficial effect on the net stable funding ratio (NSFR) under Basel III guidelines, implying that banks appear to modify the composition of liabilities to improve the stability of funding sources.Originality/valueThe study is the first attempt to simultaneously examine the impacts of monetary policy on both sides of bank balance sheets, across various banks of different sizes under a multiple-tool monetary regime. Besides, understanding how banks organize their stable funding sources and illiquid assets amid monetary shocks is an innovation of this study.


1995 ◽  
Vol 152 ◽  
pp. 9-28
Author(s):  
Garry Young

The sterling exchange rate was unusually stable in the two years following its departure from the ERM in September 1992. In effective terms it fluctuated within a fairly narrow range around an average of about 89 on the new effective exchange rate index and this was approximately the level at which it ended 1994. Since then it has depreciated by over 5 per cent and at the time of writing (11 May) there is some uncertainty as to whether it will fall further. This largely unexpected depreciation is of sufficient size to influence the development of the UK economy and in particular to increase the amount of inflationary pressure at a time when there are doubts about whether monetary policy has been tightened enough to deal with that which already exists.


Author(s):  
Acha Ikechukwu ◽  
Ikoh Itoro ◽  
Nsien Christiana

<em>This study assesses the efficacy of the Nigeria’s monetary policy against the backdrop of single digit inflation monetary policy target of the regulatory authorities. Two related questions were constructed to guide the study. Relying on both the Keynesian and Structuralist analyses, data were harvested on inflationary performance for 24 years on Nigeria economy from the World Bank data base and assessed it against achievement of the targeted single digit inflation. Thereafter Nigeria inflationary performance was compared with that of South Africa another leading African economy. It was realized that inflationary pressure on the South African economy was lower than that of Nigeria, even when both countries faced high inflation episodes during the early decade of 1990s. Findings which confirm the structuralist’s argument revealed that factors beyond the purview of monetary policy constrained the realization of single digit inflation. These include the existence of various and uncontrolled sources of liquidity in the country, government fiscal operation, which include financing of deficit budget and monetization of deficits, the existence of large informal credit markets, among others. Based on this, we recommend for concerted improvement of public infrastructure, the perfection of cashless economy programme, effective prosecution of war against corruption, and the creation of a single treasury account to help close leakages especially those linked to revenue accruable to government through MDAs and remittance to States and MDAs, among others.</em>


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