Post-crisis monetary policy frameworks in sub-Saharan Africa
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Date
2011
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
Willey
Abstract
Most of the monetary policy frameworks which use a domestic anchor for monetary policy in sub-Saharan Africa
(SSA) employ quantitative money targets. Although these frameworks proved useful in reducing inflation in SSA, they are not
well suited to the discretionary fine tuning of monetary policy. Monetary policy frameworks should be reformed in the post-crisis
period, especially in the ‘frontier markets’ of SSA, where the need for activist demand management will grow in line with
economic development and the integration of domestic financial sectors into global markets. Reforms should include adopting a
broader set of policy objectives in addition to inflation, replacing broad money as the intermediate target with a more sophisticated
set of indicators and forecasts and reform of the operating target. In essence, central banks should introduce a form of inflation
targeting lite. This should be complemented by measures to strengthen the transmission mechanism of monetary policy.
Description
Keywords
Monetary Policy, Sub-Saharan Africa, Post-crisis
Citation
Kasekende, L., & Brownbridge, M. (2011). Post‐crisis Monetary Policy Frameworks in sub‐Saharan Africa. African Development Review, 23(2), 190-201.