Economic and Financial Review


Central Bank of Nigeria


Liquidity management, Monetary policy rate, Interbank rate, Non-Linear Autoregressive Distributed Lag Models (NARDL)


The paper assesses the response of monetary policy target variables to liquidity management instruments, using a Non-linear Autoregressive Distributed Lag (NARDL) model. The analysis focuses on the short end of liquidity management and provides evidence of long-run asymmetric effects of liquidity management instruments, notably, the monetary policy rate (MPR) and excess reserves of banks on the inter-bank rate. The findings show that the impact of discretionary and autonomous liquidity factors remains symmetric. In addition, the policy target rate is more sensitive to a monetary contraction than accommodation.

Author Bio

The authors are staff of the Research Department, Central Bank of Nigeria.

Publication Title

CBN Economic and Financial Review





First Page


Last Page


Recommended Citation

Kure et al., (2021). An Empirical assessment of liquidity management instruments in Nigeria. Economic and Financial Review, 59(3), 27-58.

Included in

Economics Commons



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