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Central Bank of Congo : Four Factors Affecting Monetary Policy Effectiveness

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  • PINSHI, Christian P.

Abstract

Four factors affect the effectiveness of monetary policy, three of which are exogenous, fiscal dominance, dollarization and global risks; one is endogenous, monetary policy framework that integrates strategy, tactics and governance of monetary policy. We show that the factors that undermine the effectiveness of the Central bank of Congo (BCC) are much more exogenous. However, the monetary policy framework needs to be rethought. For a lasting effectiveness of the BCC’s monetary policy, it would be necessary to put in place sustainable fiscal discipline, serious de-dollarization measures, and economic growth policies that strengthen resilience.

Suggested Citation

  • PINSHI, Christian P., 2020. "Central Bank of Congo : Four Factors Affecting Monetary Policy Effectiveness," MPRA Paper 104841, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:104841
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    References listed on IDEAS

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    1. Mr. Jean-Claude Nachega, 2005. "Fiscal Dominance and Inflation in the Democratic Republic of the Congo," IMF Working Papers 2005/221, International Monetary Fund.
    2. Olivier Blanchard, 2004. "Fiscal Dominance and Inflation Targeting: Lessons from Brazil," NBER Working Papers 10389, National Bureau of Economic Research, Inc.
    3. Afolabi, Joseph Olarewaju & Atolagbe, Oluwafemi, 2018. "Empirical analysis of fiscal dominance and the conduct of monetary policy in Nigeria," MPRA Paper 88786, University Library of Munich, Germany.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Christian P Pinshi, 2022. "Ciblage des prévisions d'inflation : Un nouveau cadre pour la politique monétaire ?," Working Papers hal-03548273, HAL.
    2. Sephton, Peter S., 2022. "Revisiting the inflation-hedging properties of precious metals in Africa," Resources Policy, Elsevier, vol. 77(C).

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    More about this item

    Keywords

    Central Bank; monetary policy framework; fiscal dominance; dollarization; global risks.;
    All these keywords.

    JEL classification:

    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General
    • F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance

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