Monetary policy and excess liquidity: the case of Guyana
AbstractThis paper examines the monetary policy framework of Guyana. Guyana’s monetary Policy is motivated by the IMF’s financial programming model. The quantity of excess reserves in the banking system is seen as critical in determining bank credit and ultimately the external balance and inflationary pressures. Therefore, the central bank is always willing to mop up excess liquidity by selling Treasury bills. The paper examines the potential sources of persistent excess reserves. It then tests using the VAR methodology whether excess reserves exert the postulated effect on the price level and exchange rate.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 53126.
Date of creation: May 2007
Date of revision:
Publication status: Published in Social and Economic Studies 3.56(2007): pp. 101-127
excess liquidity; financial programming; monetary policy; Guyana;
Find related papers by JEL classification:
- E0 - Macroeconomics and Monetary Economics - - General
- E40 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - General
- E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit
- E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers
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