Nigeria : Strengthening Monetary and Liquidity Management
The 2002 Financial Sector Assessment Program (FSAP) identified considerable problems in containing the upsurge in liquidity in the financial system, partly caused by spending of oil receipts. In the face of persistent excess liquidity in the financ...
| Main Authors: | , |
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| Format: | Financial Sector Assessment Program (FSAP) |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2013
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2013/05/18181394/nigeria-financial-sector-assessment-program http://hdl.handle.net/10986/15961 |
| Summary: | The 2002 Financial Sector Assessment
Program (FSAP) identified considerable problems in
containing the upsurge in liquidity in the financial system,
partly caused by spending of oil receipts. In the face of
persistent excess liquidity in the financial system, the
Central Bank of Nigeria (CBN) made numerous adjustments in
the monetary policy framework and instruments; however,
these had a limited impact on monetary aggregates. A
structural excess liquidity is a common feature in oil
exporting countries like Nigeria because of sustained large
foreign currency inflows. This note reviews the current
frameworks for monetary policy and liquidity management and
discusses role of selective financial markets in improving
liquidity management in Nigeria. It also provides some
recommendations to further strengthen the implementation of
monetary policy, particularly systemic liquidity management.
This note is structured as follows: chapter one gives
context and background; chapter two gives monetary policy
framework; chapter three presents liquidity forecasting and
management; chapter four gives functioning of financial
markets and liquidity management; and chapter five gives recommendations. |
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