Monetary policy and excess liquidity: the case of Guyana
This 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.
|Date of creation:||May 2007|
|Date of revision:|
|Publication status:||Published in Social and Economic Studies 3.56(2007): pp. 101-127|
|Contact details of provider:|| Postal: Ludwigstraße 33, D-80539 Munich, Germany|
Web page: https://mpra.ub.uni-muenchen.de
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