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Impact of Cash Reserve Ratio (CRR) On Economic Growth in Nigeria
Subject area: Management and Commerce · Area of research: Cash Reserve Ratio
Abstract
Understanding the major factors, causes and effects of monetary policy on economy growth cannot be overemphasized more especially in Sub-Sahara region of Africa (Bello, Okaro & Okonkwo, 2024). Central banks across the globe monitor and analyze how effective the transmission mechanisms of monetary policy in their respective economies works. This, according to Nadani and Isah (2024), helps the central banks make informed decisions on how to adjust interest rates and liquidity levels to ensure financial stability in the economy. According to Abuka, Alinda, Minoiu and Presbitero (2019), the timing and magnitude of these adjustments are crucial, as they determine how quickly and effectively the central bank?s actions will impact the economy. Thus, a deep understanding of the transmission process allows central banks to anticipate and mitigate any potential negative effects or unintended consequences of their policy decisions. In addition, study of this nature becomes important as several arguments have been raised in the literature questioning the effectiveness of monetary policy transmission channels in Nigeria. In fact, studies show that the interest rate channel of the Central Bank of Nigeria (CBN) has been weak over time (Yusuf, Afiemo & Isah, 2022). This prompts other effective channels such as the use of cash reserve ratio (CRR) to be intensified.
How to cite this paper
@article{1713363,
author = {Aham Ikwumezie, Ogu, Callistus, Nshirim Ebonne, Akamike Okechukwu Joseph},
title = {Impact of Cash Reserve Ratio (CRR) On Economic Growth in Nigeria},
journal = {Iconic Research And Engineering Journals},
year = {2026},
volume = {9},
number = {7},
pages = {398-407},
issn = {2456-8880},
url = {https://www.irejournals.com/formatedpaper/1713363.pdf},
abstract = {Understanding the major factors, causes and effects of monetary policy on economy growth cannot be overemphasized more especially in Sub-Sahara region of Africa (Bello, Okaro & Okonkwo, 2024). Central banks across the globe monitor and analyze how effective the transmission mechanisms of monetary policy in their respective economies works. This, according to Nadani and Isah (2024), helps the central banks make informed decisions on how to adjust interest rates and liquidity levels to ensure financial stability in the economy. According to Abuka, Alinda, Minoiu and Presbitero (2019), the timing and magnitude of these adjustments are crucial, as they determine how quickly and effectively the central bank?s actions will impact the economy. Thus, a deep understanding of the transmission process allows central banks to anticipate and mitigate any potential negative effects or unintended consequences of their policy decisions. In addition, study of this nature becomes important as several arguments have been raised in the literature questioning the effectiveness of monetary policy transmission channels in Nigeria. In fact, studies show that the interest rate channel of the Central Bank of Nigeria (CBN) has been weak over time (Yusuf, Afiemo & Isah, 2022). This prompts other effective channels such as the use of cash reserve ratio (CRR) to be intensified.},
month = {January},
}