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Monetary Policy Committee and Monetary Policy Conduct in Nigeria: A Preliminary Investigation

Author

Listed:
  • Ekor, Maxwell
  • Saka, Jimoh
  • Adeniyi, Oluwatosin

Abstract

The study provides an incisive but preliminary investigation into the activities of the monetary policy committee of the central bank of Nigeria and the implications for monetary policy, using the standard deviation measure of volatility and the ordinary least square method. The findings show that the ‘internal’ members and majority of the ‘external’ members have different preferences as shown in the voting patterns. Also, there has been reduction in inflation, money and stock markets volatilities since the operations of the committee became more visible. Furthermore, there is no structural break in both the money and stock markets in the period when the central bank started releasing the personal statements and voting pattern of the committee members. The policy implication of these results is that the transparency with which the monetary policy committee has operated since 2011 has boosted policy credibility due to the reduction in markets volatility. Nevertheless, there is need for the individual committee members to be more visible to the public through different platforms as this will further improve the central bank’s communications strategy.

Suggested Citation

  • Ekor, Maxwell & Saka, Jimoh & Adeniyi, Oluwatosin, 2014. "Monetary Policy Committee and Monetary Policy Conduct in Nigeria: A Preliminary Investigation," MPRA Paper 60770, University Library of Munich, Germany, revised 2014.
  • Handle: RePEc:pra:mprapa:60770
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    References listed on IDEAS

    as
    1. Jérôme Vandenbussche, 2006. "Elements of Optimal Monetary Policy Committee Design," IMF Working Papers 2006/277, International Monetary Fund.
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    3. Jan Marc Berk & Beata Bierut, 2008. "Monetary Policy Committees: meetings and outcomes," DNB Working Papers 184, Netherlands Central Bank, Research Department.
    4. Etienne Farvaque & Piotr Stanek & Stéphane Vigeant, 2014. "On the Performance of Monetary Policy Committees," Kyklos, Wiley Blackwell, vol. 67(2), pages 177-203, May.
    5. Szilard Erhart & Harmen Lehment & Jose Vasquez Paz, 2010. "Monetary policy committee size and inflation volatility," International Economics and Economic Policy, Springer, vol. 7(4), pages 411-421, December.
    6. Alexander Jung & Gergely Kiss, 2012. "Voting by monetary policy committees: evidence from the CEE inflation-targeting countries," MNB Working Papers 2012/2, Magyar Nemzeti Bank (Central Bank of Hungary).
    7. Hansen, Stephen & McMahon, Michael & Velasco Rivera, Carlos, 2014. "Preferences or private assessments on a monetary policy committee?," Journal of Monetary Economics, Elsevier, vol. 67(C), pages 16-32.
    8. Petra Gerlach‐Kristen, 2004. "Is the MPC's Voting Record Informative about Future UK Monetary Policy?," Scandinavian Journal of Economics, Wiley Blackwell, vol. 106(2), pages 299-313, June.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Monetary policy committee decisions; voting; volatility;
    All these keywords.

    JEL classification:

    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit

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