SIGNAL EXTRACTION FROM THE BOND MARKET AND INFLATION FORECASTING IN NIGERIA
- Project Research
- 1-5 Chapters
- Abstract : Available
- Table of Content: Available
- Reference Style: APA
- Recommended for : Student Researchers
- NGN 3000
ABSTRACT
There is the global recognition of the importance of expectations in the conduct of monetary policy, which can be attributed to the growth of financial markets, and the fact that economic fundamentals are driven, by expectations of the market agents. In an ever changing economic and financial environment, the CBN would require all the information it can get to respond to these changes in accordance with its policy objectives. Some of such information can be sourced from the bond market.
The study seeks to examine the extent to which the information on private sector expectations of inflation which is contained in the yield curve that can improve inflation forecast. This would consequently increase the information set available to the CBN to forecast future inflation. The study is predicated on the premises that are enunciated in the Expectations Theory of Term Structure of Interest Rates.The theory suggests that interest rates and prices are driven by expectations.VAR model was estimated using quarterly data on security prices, inflation, MPR, and exchange rate for the period of 2006-2013.
The study finds that:
1. There is information about private sector expectation embedded in the yield curves
2. The proxy for expectation (treasury bills with 90 days maturity) has a significant effect on inflation in Nigeria
3. The yield spread can indeed improve inflation forecast in Nigeria.
The study concludes that the information embedded in the prices of securities can improve inflation forecast and monetary policy in Nigeria. From these findings, the study recommends that CBN should increase effectiveness and efficiency of monetary policy through the inclusion of the yield curve in modeling inflation in Nigeria.
Furthermore, government in collaboration with the Central Bank of Nigeria should take effective measures to improve liquidity in the bond market which often disrupt the information signals found in security prices
Related Project Materials
KNOWLEDGE AND PRACTICE OF OCCUPATIONAL SAFETY AMONG WORKERS
ABSTRACT:- This study was carried out to examine the knowledge and practice of occupational safety among workers....
INFLUENCE OF MOTHER TONGUE ON THE ORAL ENGLISH OF SECONDARY SCHOOL STUDENTS
ABSTRACT
The rate of failure recorded every year in most external examination constitutes a major concern to the educati...
MARKETING OF LOCAL MADE PRODUCT: A CASE STUDY OF LOCAL MADE HAND BAGS
ABSTRACT
Although the Nigeria economy has been characterized; with importation of everything ranging from ma...
CAUSES AND PATTERNS OF FEMALE CRIMINALITY: A CRIMINOLOGICAL ANALYSIS
ABSTRACT
This study investigated the causes and patterns of female criminality, using criminological an...
THE EFFECT OF INTERNALLY GENERATED REVENUE ON ECONOMIC GROWTH OF LAGOS STATE (2010-2014)
STATEMENT OF THE PROBLEM
The state government is faced with myriads of problems ranging from corruption and embezzlement...
EFFECTS OF THE USE OF REWARD AND PUNISHMENT ON THE ACADEMIC PERFORMANCE OF PRIMARY SCHOOL PUPILS IN SOME SELECTED PRIMARY SCHOOL
ABSTRACT
This study is designed to investigate the effect of the use of reward and punishment in the ac...
ASSESSMENT OF LOCAL GOVERNMENT ADMINISTRATION AND RURAL DEVELOPMENT IN ATAKUNMOSA WEST LGA OF OSUN STATE
Background of the study
Since the implementation of the 1976 local government reform, the concep...
A Hybrid Adjacency and Time-Based Data Structure for Analysis of Temporal Networks
Background
Related Work I begin with background information on ways for representing temporal networks and data structures for storing (s...
Comparison of Academic Performance of Junior Secondary School students in English Language and integrated science in external examination
Abstract
The study compared the scores of students in English Language and Integrated Science at the Junior Secondary Sc...
THE EFFECTS OF INFORMATION TECHNOLOGY ON THE PERFORMANCE OF THE SECRETARIES IN THE FRONT OFFICE
ABSTRACT
The study examined the effects of information technology on the performance of secretaries in the front office....
