This study seeks to assess the impact of the monetary policy instruments used by the Bank of Sierra Leone in controlling inflation for the period of 12 years starting from 2010 to 2021. In a bid to address the objectives of the study, the secondary data collected were analyzed using descriptive statistics, correlation analysis and the multiple linear regressions to test the hypothesis of the study. The study discovered that monetary policy rate, exchange rate and money supply are all having a positive and significant impact in controlling inflation in Sierra Leone. The study therefore recommends that the most appropriate solution to inflation in Sierra Leone is supply management, which entails increase in the domestic production of consumer goods to meet the ever-increasing consumer effective demand.
Table of Contents
1.0 Introduction
1.1 Background of the Case Study
1.2 Statement of the Problem
1.3 Objectives of the Study
1.4 Research Questions
1.5 Statement of Hypothesis
1.6 Significance of the Study
1.7 Scope of the study
1.8 Delimitation of the Study
1.9 Definition of Terms
1.10 Organization of the Study
1.11 Summary
2.0 Introduction
2.1 Theoretical Literature
2.1.1 The Classical View of Monetary Policy
2.1.2 Keynesian View of Monetary Policy
2.1.3 The Monetarist View of Monetary Policy
2.2 An Overview of Sierra Leone Monetary Policy
2.2.1 Administration of Monetary Policy in Sierra Leone
2.2.2 Objective of the Bank of Sierra Leone (BSL) Monetary Policy
2.2.3 Instrument of Sierra Leone Monetary Policy
2.2.4 Monetary Policy Formulation
2.2.5 Efficiency of Monetary Policy during Inflation
2.2.6 Efficiency of Monetary Policy during Depression
2.2.7 Operation of Monetary Policy
2.2.8 Inflation in Sierra Leone
2.3 Money Supply in the Economy
2.3.1 Causes of Inflation
2.3.2 Types of Inflation
2.3.3 Inflation Rate in Sierra Leone
2.3.4 Monetary Policy as a Control Measure on Inflation in Sierra Leone
2.3.5 Effect of Inflation
2.4 Inflation and Economic Growth
2.4.1 Composite Table of GDP and Inflationary Rates (Billions)
3.0 Introduction
3.1 Research Design
3.2 Population and Sampling and sample size
3.2.1 Population
3.2.2 Sampling
3.2.3 Sample size
3.3 Data Collection Method.
3.4 Data Analysis and Presentation
3.5 Ethical Consideration
3.6 Chapter Summary
4.0 Introduction
4.1 Presentation of Results
4.2 Correlation Matrix
4.3 Results to Research Questions and Objectives
4.3.1 What has been the causes of inflation in Sierra Leone since 2010 to date?
4.3.2 Has monetary policy been effective in achieving its objectives?
4.3.4 What has been the major monetary policy instruments used to address the problem of inflation?
5.0 Introduction
5.1 Summary of Findings
5.2 Conclusion
5.3 Recommendations
Research Objectives and Themes
This study aims to assess the effectiveness and impact of monetary policy instruments utilized by the Bank of Sierra Leone between 2010 and 2021 to control inflation and influence economic performance.
- Analysis of monetary policy instruments (e.g., OMO, reserve requirements, interest rate changes).
- Evaluation of the correlation between money supply, inflation rates, and GDP growth.
- Examination of the causal factors driving inflation in the Sierra Leonean economy.
- Assessment of the effectiveness of Bank of Sierra Leone interventions on macroeconomic stability.
Excerpt from the Book
2.2.3 Instrument of Sierra Leone Monetary Policy
In pursuing the objective of price stability, inflation control, full employment and accelerate economic growth the central banks uses some method or instruments. The tools used can be broadly categorized into two such as the qualitative or general controls which aim to regulate the total quantity, amount or size or the volume of deposits or advances created by commercial banks. They relate to the value and the cost of banks credit in general without regard to the particular sectors or economic activity in which the credit is used. The general instrument of monetary policy include open market operation, Bank rate and Reserve requirement ratio. They can reduce the volume of bank credit available to the economy.
The second category is the qualitative or selective control which aim at controlling certain channels or to discourage them from lending for certain purposes. They include direct credit control, moral persuasion, special directives, prudential guidelines, selective control and control on non – bank financial institutions.
Chapter Summaries
CHAPTER ONE: Provides the research foundation, detailing the background, problem statement, research objectives, and the significance of studying monetary policy in Sierra Leone.
CHAPTER TWO LITERATURE REVIEW: Reviews the theoretical underpinnings of monetary policy, including Classical, Keynesian, and Monetarist views, and provides an overview of the policy context in Sierra Leone.
CHAPTER THREE RESEARCH METHODOLOGY: Describes the case study research design, population, sampling techniques, and data collection methods used to gather and analyze quantitative and qualitative data.
CHAPTER FOUR PRESENTATION AND ANALYSIS OF RESULTS: Presents empirical findings using regression models and correlation matrices to evaluate the relationship between monetary policy instruments and macroeconomic variables.
CHAPTER FIVE SUMMARY, CONCLUSIONS AND RECOMMENDATIONS: Provides a summary of findings, conclusions on policy efficacy, and actionable recommendations for supply management and economic reform.
Keywords
Monetary Policy, Inflation, Bank of Sierra Leone, Interest Rate, Money Supply, economic growth, price stability, GDP, regression analysis, central bank, fiscal policy, macroeconomic variables, monetary instruments, liquidity, subsistence sector.
Frequently Asked Questions
What is the primary focus of this research?
The research focuses on a critical analysis of the monetary policy instruments employed by the Bank of Sierra Leone to curb inflation during the period 2010–2021.
What are the central themes of the work?
The work explores inflation dynamics, the efficacy of specific central bank tools, the role of money supply, and the impact of these strategies on national economic growth.
What is the core objective of the study?
The core objective is to determine if the monetary policy instruments used by the Bank of Sierra Leone are efficient in achieving price stability and controlling inflation.
Which scientific methods are applied in this thesis?
The study utilizes a case study design, secondary data collection, descriptive statistics, correlation analysis, and multiple linear regressions performed via E-views software.
What topics are covered in the main body?
The main body covers the theoretical framework of monetary policy, the administration and instruments used by the Bank of Sierra Leone, causes of inflation, and the empirical analysis of gathered economic data.
Which keywords characterize this dissertation?
Key terms include Monetary Policy, Inflation, Bank of Sierra Leone, Money Supply, GDP, Price Stability, and Regression Analysis.
Does the study find that monetary policy has been successful?
The findings suggest that while monetary policy variables exert an influence, their impact on inflation control in Sierra Leone has been generally insignificant, leading to the conclusion that supply management is also necessary.
What role does the 'Monetary Policy Rate' play according to the research?
The Monetary Policy Rate is identified as a tool with a favorable and considerable impact on the control of inflation within the specific context of the Sierra Leonean economy.
- Arbeit zitieren
- Joseph Turay (Autor:in), 2022, Critical Analysis of the Monetary Policy Instruments used by the Bank of Sierra Leone in Controlling Inflation, München, GRIN Verlag, https://www.grin.com/document/1372394
