 |
Liquidity Management by the CBN |
Liquidity management involves the supply/ withdrawal from the market the amount of liquidity consistent with a desired level of short-term interest rates or reserve money. It relies on the daily assessment of the liquidity conditions in the banking system, to determine its liquidity needs and thus the volume of liquidity to allot or withdraw from the market. The liquidity needs of the banking system are defined by the sum of reserve requirements imposed on banks, excess reserves, i.e. funds held in excess of these requirements, autonomous factors. In other words, a set of items on the central bank balance sheet, which have an impact on banks’ liquidity, needs but are not under the direct control of the central bank (e.g. banknotes in circulation, government deposits or net foreign assets). Liquidity management is supported by daily liquidity forecasting of the central bank balance sheet to guide the Bank’s management on the expected level of liquidity in the system over a period of time from the current period so that appropriate measures are taken to prevent undesirable market developments, that may negatively impact on the objective of price stability.
Enjoy this article? Feel free to share your comment, idea or opinion in the comment section
Related Articles
|
Four Ways to Improve Company Culture and Increase Your Company’s Bottom LineThere are a few things to always pay close attention to in a company, like your employees’ salaries, morale in the office, understanding of vision and many more. But one aspect of your company’s daily activities that need to be reinforced constantly is the company culture. This is b [Read more]
|
Posted: 7 years ago |
|
Making the Most of Year 2024 - A ContemplationAs we are about to get into June, signifying the end of the first half of the year, it's a perfect time to reflect on how to turn the rest of 2024 into something truly fulfilling. Depending on the level of achievement of your set goals for the year, we have put together some ideas to guide your [Read more]
|
Posted: 2 years ago |
|
Challenges from Nigeria’s Economic RecoveryThis piece documents the facts of the supply-side recovery in Nigeria in the last few years and identifies the triggers. It then discusses the challenges the new turn of events pose to policy makers, who are only just responding to the previous downturn. Data that have become available since reforms [Read more]
|
Posted: 16 years ago |
Featured Video
Searching for Management Training Courses? Local or International?