The Gambia: Demand for Broad Money and Implications for Monetary Policy Conduct

Author/Editor:

Subramanian S Sriram

Publication Date:

September 1, 2009

Electronic Access:

Free Download. Use the free Adobe Acrobat Reader to view this PDF file

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

This paper evaluates the demand for broad money (M2) in The Gambia for January 1988-June 2007. There appears to be a long-run relationship for demand for real M2, but the relationship is not stable. Exogenous output shocks, financial innovation, changes in income velocity, and inadequate data quality contribute to the instability. The authorities may need to apply the monetary targeting regime flexibly in the overall objective of preserving price stability. A possible option for The Gambia is to become an inflation targeter lite.

Series:

Working Paper No. 2009/192

Subject:

Commercial banks Demand for money Financial institutions Inflation Monetary base Money Prices Treasury bills and bonds

English

Publication Date:

September 1, 2009

ISBN/ISSN:

9781451873399/1018-5941

Stock No:

WPIEA2009192

Pages:

41

Please address any questions about this title to publications@imf.org