Implementation Of Monetary Policy Research Articles

EFFECT OF DEPOSITS AND NON-PERFORMING LOANS ON BANK PROFITABILITY – A CASE STUDY ON CONVENTIONAL COOPERATIVE BANK OF BARODA REGION

The banking sector plays a vital role in providing essential financial services, facilitating the allocation of funds to productive ventures, and aiding in the implementation of government fiscal and monetary policies. Historically, Non-Performing Assets (NPAs) have posed significant challenges for banks, but reducing NPAs has now become a top priority. The strength of a nation's economy relies heavily on the health of its cooperative banking sector. This study analyzes the non-performing assets (NPAs) of The Pragati Co-operative Bank Ltd. over a six-year period from 2017-18 to 2022-23. The research examines various aspects related to NPAs, including gross NPAs, net NPAs, provisions made towards NPAs, loans and advances, deposits, and relevant ratios such as net NPA ratio, provision coverage ratio, and credit-to-deposit ratio. The data analysis reveals that the bank maintained a zero net NPA throughout the period, indicating effective provisioning strategies. While gross NPAs fluctuated, the provision coverage ratio remained strong, suggesting the bank's ability to withstand asset quality pressures. The study also investigates the relationship between gross NPAs and net profits using correlation and regression analysis, finding a positive correlation but minimal significant impact of gross NPAs on profitability. Overall, the research highlights The Pragati Co-operative Bank Ltd.'s proactive approach to NPA management, financial stability, and adaptability to changing market conditions.

Cointegration Behavior and Diagnostic Stability of Philippine Monetary Policy Implementation During the Period From 1990 to 2022

The observations made in this study were used to evaluate the diagnostic stability of the Philippine Central Bank’s selected monetary policy targets, namely, the Gross Domestic Product and inflation, with money supply, credits, interest rates, and exchange rates, as independent variables, using the autoregressive distributed lag and error correction model analysis. The co-integrating behavior depicted that all p-values of less than the 5% significance level generated different behaviors. However, analysis of the Central Bank’s performance showed that there were no unit roots at all (p > .05) that signified a strong indication of cointegration behavior. The diagnostic stability of the Philippine monetary policy implementation was established over the period from 1990 to 2022. Further, money in circulation caused increases in domestic prices, interest rates, and inflationary pressure, and ultimately affected GDP (ppp). Understanding cointegration behavior is an imperative implication for policy makers to observe and take into consideration.

Monetary Policy Dynamics and the Nigeria’s Global Competitiveness: The Missing Link

Despite the series of monetary policies adopted by the Nigerian government over time, the (Nigerian) economy in comparison to other countries in the world like South Africa, the USA, Ghana, and the like is still improvised. Still, inconsistency between monetary policy formulation and implementation remains another major issues yet unattended to. It is in this regards that, the current study is dedicated towards examining the effect of monetary policy dynamics and the Nigeria’s global competitiveness from 1992 to 2021 (i.e., 30 years) using Autoregressive Distributed Lag (ARDL) model. The study disclosed that, the variables are integrated at level and first difference while the ARDL Bound test evidenced that, the series cointegrates. Specifically, monetary policy rate has a positive minimal effect on Nigeria’s global competitiveness, while the CRR improved Nigeria’s global competitiveness significantly. However, both lending rates and exchange rates have a significant negative effect on economic competitiveness. Consequently, the paper concludes that both the cash reserve ratio and the Nigeria’s demeaning state are attributed to the high exchange rate (EXR) and high lending rates. Thus, the paper submits that the current monetary policy rates are sustained and that all DMBS should adhere to the stipulated Cash Reserve Ratio (CRR) since it has improved the Nigeria’s global competitiveness significantly. Lastly, the study confirmed that, the missing link is the policy surmount on the part of the Nigerian government.

PERAN DAN KONSEKUENSI KEBIJAKAN MONETER DALAM EKONOMI SYARIAH

Monetary policy is one of the crucial instruments in regulating the economy of a country. In conventional economics, monetary policy is implemented through mechanisms such as interest rates and open market operations. However, in Sharia-compliant economies, which are based on the prohibition of riba (interest), monetary policy must be executed using instruments that adhere to Sharia principles. This study adopts a literature review methodology, thus focusing on bibliographic materials by seeking relevant literature. The theoretical data utilized in this research is obtained from library literature and analyzed based on various references in this paper. By understanding the role and consequences of monetary policy in Sharia economics, it is hoped that new insights can be provided for the development and implementation of monetary policies that align with Sharia principles.

Leviathan financialized?

AbstractIn The Rise of Central Banks, Leon Wansleben provides a perceptive account of the evolution of central banking practices in the United States, the United Kingdom, Germany, and Switzerland from the 1970s through the subprime mortgage crisis and the global pandemic. Focusing on the concrete practices of monetary policymakers, Wansleben usefully explores the relationship between the development of novel techniques of monetary policy implementation and the financialization of the economy, with the paradox that the central bank appears more powerful, but exercises this power in a system that is ever more prone to crisis. While agreeing with the broad strokes of Wansleben’s analysis, I raise questions about the nature of the ‘infrastructural power’ exercised by the state through financial markets, suggesting that the growing salience of the central bank in the policymaking apparatus should not be conflated with its independent influence over the direction of economic policy.

Research on the potential impact of CBDC on China’s monetary policy framework

Central Bank Digital Currency（CBDC） has the characteristics of traceability and editability. This article respectively elaborates on these two technical characteristics that are different from traditional currencies, and analyzes their impact on the basic elements of the monetary policy framework, namely the ultimate goal of monetary policy, the anchoring method of intermediary goals, monetary policy tools, and the transmission mechanism of monetary policy. After analysis, the research results show that the traceability and editability of CBDC can respectively improve and improve the basic elements of the monetary policy framework, and optimize our country's monetary policy framework as a whole. It is recommended to legally clarify the subjects and procedures that can access CBDC data and edit CBDC algorithms to ensure that the traceability and editability of CBDC are not abused. At the same time, pay close attention to its impact on various basic elements, and promptly Adjust the proportion of these two features in the implementation of monetary policy so that monetary policy can achieve the desired effect.

Inflation in Eurozone, Converging and Diverging Countries

The paper analyses the progress eurozone members made towards the convergence of inflation rates, which is a necessary condition for the effective implementation of the common monetary policy broadly appropriate for all members. It was expected that the common monetary policy would lead to the convergence of member states’ economic performance, including inflation rates. The literature review shows that the majority of authors agree that a significant convergence process occurred before 1999, but no further progress was made after that. Our analysis indicates that inflation processes in member countries are diverse. Namely, monetary stability has been achieved in some countries, while inflation is more volatile in others. There is an insufficient correlation between inflation rates, the different transmission of shocks to inflation and different exposure to risks of rising energy and food prices. We conducted a unit root test on the series of inflation differentials for each country to determine which countries were in a process of absolute convergence. In the group of the first 12 members, we found evidence of convergence for the majority of countries, as there is no unit root. Thus, individual countries indeed made progress toward greater monetary stability (and the EMU level). We examined the standard deviations of the inflation differentials in the group of converging countries (separately for converging core and peripheral countries) and found no evidence that these groups of countries are becoming more homogeneous. In the group of new EMU members, we found evidence of convergence towards the EMU average for only four countries in the period of their membership, but not in the previous period.

Causal Relationship According to Toda-Yamamoto Methodology Between Economic Growth Rates and Inflation in the Iraqi Economy During the Period (1990 - 2021)

This study aims to test the causal relationship between inflation and economic growth during the period (1990-2021) in Iraq. The long-term causality test was conducted using the Toda-Yamamoto methodology, developed based on a study conducted in 1995 by Toda and Yamamoto. The results indicated a unidirectional causal relationship between economic growth and inflation, meaning that an increase in growth rates has an impact on inflation. The study recommends the implementation of monetary policies to reduce monetary growth. This could include reducing interest rates or implementing other monetary policies to control the increase in money supply, in addition to improving the supply by increasing production and enhancing efficiency in the economy. Policies encouraging investment and promoting production can contribute to meeting growing demand without causing an increase in inflation.

Об основных направлениях единой государственной денежно-кредитной политики на 2024 год и период 2025 и 2026 годов: мнение экспертов Финансового университета

The subject of the study is the tasks, principles, measures and tools, mechanism and factors of the implementation of the unified state monetary policy for the period 2024-2026, taking into account the current macro- and geo-economic situation. The purpose of the work is to identify the problems of formation and implementation of monetary policy in the medium term on the basis of expertise and analysis of the Main Directions of the unified state monetary policy for 2024 and the period 2025 and 2026. In order to successfully achieve the task of transforming the Russian economy. It is established that when targeting inflation as a monetary policy regime, factors such as the introduction of unprecedented sanctions against the Russian real and financial sectors, which had a significant negative impact on logistics and calculations, as well as restrictions and suspension of work in the Russian economy of a number of international companies, causing an increase in the value of the monetary contribution, should be taken into account. the contribution of policy to the economic development of Russia related to the process of structural restructuring of the economy, the activation of internal growth factors. Special attention is paid to the problems of modern principles of monetary policy and the effects of its transmission mechanism. The conclusions are drawn that the Main Directions of the unified state monetary policy for 2024 and the period of 2025 and 2026 established by the Bank of Russia deserve a positive assessment, taking into account the comments and recommendations formulated by experts of the Financial University.

A Field Guide to Monetary Policy Implementation Issues in a New World with CBDC, Stablecoin, and Narrow Banks

This paper develops an analytical framework aimed at shedding light on the implications of the evolution of financial market structure for monetary policy implementation and transmission. The basic model builds on that developed in Chen et. al. (2014) which, in turn, draws inspiration from the pioneering work of Tobin (1969) and Gurley and Shaw (1960). The paper focuses, in particular, on the implications of introducing new types of fixed-rate financial assets in the financial system including retail and wholesale central bank digital currency (CBDC), stablecoins issued by narrow nonbanks, and deposits issued by narrow banks. The analysis also provides a crude way of capturing some of the effects of bank capital and liquidity regulation on financial intermediation and monetary policy implementation. Perhaps the most important conclusion is that the introduction of new fixed-rate assets by the Federal Reserve or by other financial intermediaries can have significant effects on equilibrium interest rates and patterns of financial intermediation and may also affect the potency of monetary policy tools. These effects are most pronounced when new financial assets are close substitutes for existing financial assets.

Central Bank Digital Currency and Monetary Policy Implementation

Central Bank Digital Currency and Monetary Policy Implementation

Монетарне золото як складова міжнародних резервів центральних банків

Introduction. International reserves of central banks (CBs) are used to support the exchange rate of national currencies and have an impact on the monetary policy. In the unified standards of the IMF, international reserves include only gold, and not all precious metals. The state can call on its reserves in case of emergencies, so they are often compared with the volume of imports. It was natural to expect changes in the structure of international reserves due to the coronavirus pandemic. Problem Statement. Monetary gold does not lose its weight as a stable component of reserves, despite the volatility of world prices and the comparative profitability of other components of these reserves. Countries differ in the dynamics and share of monetary gold in reserves, as well as the possibilities of mining and physical preservation of reserves. A serious problem is the adequate revaluation of precious metals, which affects the high volatility of international reserves of many countries. The purpose of the article is to assess the role of monetary gold as a component of international reserves for the implementation of monetary policy in conditions of systemic stress, such as the coronavirus pandemic. Methods. Comparative and correlational analysis was used to characterize changes in reserves; abstract-logical analysis - to generalize the reasons for differences in the levels of the gold reserve; statistical and economic analysis - to study the influence of these variability factors on gold. Results. The analysis made it possible to distinguish monetary gold from the general circle of precious metals, to structure non-monetary gold. Several types of risks related to the ownership of gold have been singled out, which the Central Bank should take into account when managing reserves: the threat of manipulation by large players on commodity and stock exchanges; high historical and expected price volatility; the probability of loss of gold during storage and transportation due to damage, robbery, counterfeiting, etc. Conclusions. Gold remains a valuable component of the country's currency reserves. At the same time, it should not be considered as an anti-inflation product for the short term, although it retains the status of a reliable asset. There is no significant correlation between the size of the gold reserve and its share in the reserves of the Central Bank. The hypothesis that a higher level of development of the country's economy corresponds to a smaller share of gold was not confirmed. In Ukraine, the National Bank should define, as a component of monetary policy, a separate strategy for monetary gold, taking into account the state of war and the prospects of post-war economic reconstruction. In the management of monetary gold reserves, central banks should take into account the risks inherent in it. At the same time, it can be successfully used to neutralize certain risks of general reserves and liquidity risk, soften fluctuations in the national currency rate and normalize the balance of payments. It is advisable to improve the toolkit of gold price forecasting and stress testing using hypothetical and historical scenarios.

Changes in monetary policy implementation over time

In this study, we utilise a time-varying parameter vector autoregressive model to investigate the relationship between central bank liabilities and the overnight policy rate across three countries with distinct monetary policy frameworks. Our findings reveal that a consistent negative correlation between these variables is present only in the case of the conventional reserve regime. For the other regimes, an initial significant negative relationship between reserves and interest rates is observed, but this effect diminishes with the adoption of new frameworks. These results suggest that the emergence of novel operational structures for central banks has disrupted the traditional approach to monetary policy implementation. One practical consequence of this” decoupling” between interest rates and reserves is that central banks in the United States, Canada, and similar systems can effectively employ their balance sheets in conjunction with standard interest rate policies. However, this does not apply to reserve regimes that continue to depend on open market operations for steering interest rates

Qard Al Hasan: Instrumen Moneter Syariah Dalam Peningkatan Kesejahteraan Masyarakat Indonesia

Conventional interest-based monetary policy has yet to be effective in overcoming monetary problems. So, this article is to discuss how to apply qard al hasan as one of the sharia monetary instruments in Indonesia. The method used is literature study. The results of the analysis and discussion show that Qard al Hasan's Monetary Policy can be implemented in Indonesia. This is because Qard al Hasan is very in accordance with the Qur'an and Hadith and the implementation of Qard al Hasan-based monetary policy can not only stabilize prices and inflation, but also can increase national production or GDP and reduce the number of poor people. Bank Indonesia as the executor of Monetary Policy can apply the Qard al Hasan system, because Bank Indonesia has started to create a database of community groups that have Micro, Small and Medium Enterprises, so that the implementation of Qard al Hasan in Indonesia can be implemented.

Інтеграційні процеси в системі захисту національних економічних інтересів країн Західної Європи у повоєнний період

The protracted war intensifies Ukraine’s political, financial, and economic dependence on partner countries, which determines the importance of protecting national interests and strengthening its own competitive advantages. At the same time, further integration of the country into the global economic space is a victory, national security, and a successful post-war recovery guarantee. It determines the importance of the historical assessment of the integration processes’ role in national economic development. The purpose of the study is to summarize the results of the European integration impact on the post-war economic reconstruction of the Western European countries in terms of overcoming the region's financial and economic dependence on foreign aid and protecting national interests. Concepts of international economic integration are the theoretical basis of the research. The research methodology is based on the problem-logical, historical-genetic, comparative, and statistical analysis. The research determines that the formation of regional European associations and the involvement of Western European countries in the integration processes, which was carried out through the trade barriers reduction, the multilateral agreements, and the assistance regime agreements, was caused by a number of conditions and factors, including harmful post-war social and economic consequences, the destabilization of American-European trade and the dollar deficit, powerful foreign aid within the framework of the Marshall Plan, which contributed to the restoration of the industrial and commercial potential of countries, the joint policy of the US and Western European countries regarding security, peace, and prosperity. It has been proven that in the post-war reconstruction terms, trade and economic integration became a determinant of the activation of intra-European trade, the formation of a single European market, the strengthening of export technology, which helped to overcome the financial and economic dependence of the region on the USA and the realization of the national competitive advantages of the Western European countries in international trade. The integration processes were an induced, but objective response of the Western European governments to post-war threats and risks. Although integration involved some limitations of countries in terms of legal regulation and the joint implementation of trade, monetary, and financial policies, it led to the formation of a system of supranational economic management based on democratization, harmonization, and consolidation, contributed to the realization of national interests in terms of political security and economic growth.

Money Market Fund Repo and the ON RRP Facility

Between January 2021 and June 2022, money market funds' (MMFs') investments in the Federal Reserve's Overnight Reverse Repurchase (ON RRP) facility rose by $2 trillion, while their private repo lending fell by almost $500 billion. These sizable shifts give us an opportunity to examine how monetary policy implementation and the ON RRP facility interact with the private repo market.

Monetary policy implementation: Which “new normal”?

This article provides a simple model of monetary policy implementation, analyzing both the interest rate steering (IRS) and the quantitative easing (QE) policies. The model shows that the “floor system”, introduced with QE policies, is preferable to the traditional “corridor system”, for two reasons. First, it endows central banks with one more degree of freedom, since the interest rate and the balance sheet policies become two independent instruments. Second, it enhances the ability of central banks to keep the money market rates in line with their target level. This second prediction is confirmed by an empirical analysis of the money market in the euro area. Therefore, in the “new normal” monetary policy should be implemented by steering the level of interest rates within a floor system, instead of relying on the corridor system used in the old IRS framework.11I wish to thank the Reviewer and the Editor for their very useful comments on a previous version of this article.

Firm-level uncertainty and monetary policy transmission: analysis based on investment behavior and annual report text

The loose monetary policy has not translated into actual credit increments, and the real investment rate has declined. This paper extracts the level of policy uncertainty perception from enterprise management analysis and discussion based on text analysis methods to identify the investment intention of enterprises. It is found that enterprise uncertainty perception can weaken corporate investment intention, thus hindering the promotion of loose monetary policy on investment. On the one hand, this paper verifies that uncertainty perception can weaken the effectiveness of monetary policy implementation at the micro level of enterprises; On the other hand, this paper finds that merely being based on the financing constraint theory may not be able to explain the capital investment behavior of Chinese companies. It also requires examining the investment intentions of enterprises themselves, enriching the research conclusions of enterprise investment theory.

The Impact of Monetary Policy on the Transformation to Circular Economy: Does Foreign Direct Investment Speak?

Our paper examines the relationship between State Bank of Vietnam's implementation of monetary policies, Foreign direct investment inflows, and the country's move toward a circular economy. By using the PLS-SEM method with 330 observations, the study demonstrated that the positive impacts of the State Bank of Vietnam's monetary policies will aid in promoting Vietnam's transition to the circular economy, either when the State Bank offers a contractionary or expansionary or sustainable monetary policy. Moreover, when a country receives foreign direct investment, it tends to encourage companies' ability to create green, environmentally friendly products. Foreign direct investment inflows also stimulate a country to the transition to circular economy. Our research highlights the regulatory factor of Foreign Direct Investment capital that will increase 0.204 and 0.07 levels of impact between stable and expansionary monetary policy on the shift to circular economy. The results of this study contribute new factors in the theory of circular economy as well as policy implications for the State Bank of Vietnam, thereby aiding in the State Bank's development of an appropriate monetary policy to encourage foreign direct investment and the transition to the circular economy.

Monetary Policy Implementation and Financial Performance of Commercial Bank in Rwanda: A Case of Equity Bank, Rwanda

Monetary Policy Implementation and Financial Performance of Commercial Bank in Rwanda: A Case of Equity Bank, Rwanda