Issues in reserve requirement and monetary management in Nigeria

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dc.contributor.authorOtu, Moses F.
dc.contributor.authorTule, Moses K.
dc.date.accessioned2018-10-22T15:58:00Z
dc.date.available2018-10-22T15:58:00Z
dc.date.issued2002-09
dc.descriptionBoth authors were principal and senior economists in the Research Department, Central Bank of Nigeria at the time of publication of this article.en_US
dc.description.abstractReserve requirement has been used over the years as a tool of monetary management. Accordingly, banks are required by law to hold a fraction of their deposit liabilities with the Central Bank as reserves. In recent times however, the use of reserve requirement has undergone modification, from drastic reductions to outright elimination. This is attributed to the perception that under rapidly changing structure and financial system innovations, reserve requirement is a weak tool of monetary management. This paper reviews these issues and examines the effects of required reserve on the balance sheet operations of Deposit Money Banks and its impact on the monetary aggregates in Nigeria. It revealed that reserve requirement has significant cost implications on both the Central Bank and the Deposit Money Banks, and that its potency as a tool of monetary management has been weakened as the targeted reserve does not reflect the total reserve level in the system. The paper recommends a drastic reduction of reserve requirement and fine-tuning to accommodate the interest of smaller banks.en_US
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dc.description.provenanceMade available in DSpace on 2018-10-22T15:58:00Z (GMT). No. of bitstreams: 1 Issues in reserve requirement and monetary and monetary manament in nigeria.pdf: 915010 bytes, checksum: 193f263cefb4b295293b9851e38baa50 (MD5) Previous issue date: 2002-09en
dc.description.sponsorshipCentral Bank of Nigeriaen_US
dc.identifier.citationOtu, M. F. & Tule, M. K. (2002). Issues in reserve requirement and monetary management in Nigeria, Economic and Financial Review (EFR), 40(3), 35-51.en_US
dc.identifier.issn1957-2968
dc.identifier.urihttp://repo.cbn.gov.ng/jspui/handle/123456789/462
dc.language.isoenen_US
dc.publisherCentral Bank of Nigeria, Research Department.en_US
dc.relation.ispartofseriesVol. 40;No. 3
dc.subjectReserve requirementen_US
dc.subjectFinancial system innovationsen_US
dc.subjectDeposit money banksen_US
dc.subjectMonetary policyen_US
dc.subjectMonetary managementen_US
dc.subjectExchange rate regimesen_US
dc.subjectInter-Bank Foreign Exchange Market (IFEM)en_US
dc.subjectLiquidity Overhangen_US
dc.subjectAutonomous Foreign Exchange Market (AFEM)en_US
dc.subjectFiscal Dominanceen_US
dc.titleIssues in reserve requirement and monetary management in Nigeriaen_US
dc.typeArticleen_US

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