01756cas a2200241 a 4500 AALejournalIMF004027 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451863758 1018-5941 BD-DhAAL BD-DhAAL Saxegaard, Magnus. Excess Liquidity and Effectiveness of Monetary Policy : Evidence from Sub-Saharan Africa / Magnus Saxegaard. Washington, D.C. : International Monetary Fund, 2006. 1 online resource (52 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students This paper examines the pattern of excess liquidity in sub-Saharan Africa and its consequences for the effectiveness of monetary policy. The paper argues that understanding the consequences of excess liquidity requires quantifying the extent to which commercial bank holdings of excess liquidity exceed levels required for precautionary purposes. It proposes a methodology for measuring this quantity and uses it to estimate a nonlinear structural VAR model for the CEMAC region, Nigeria and Uganda. The study suggests that excess liquidity weakens the monetary policy transmission mechanism and thus the ability of monetary authorities to influence demand conditions in the economy. Mode of access: Internet IMF Working Papers; Working Paper ; No. 2006/115 Full text available on IMF http://elibrary.imf.org/view/journals/001/2006/115/001.2006.issue-115-en.xml IMF e-Library