Financial Inclusion and Monetary Policy Effectiveness in Ghana

William Godfred Cantah (), James Peprah and Paul Owusu Takyi ()
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William Godfred Cantah: University of Cape Coast
Paul Owusu Takyi: Kwame Nkrumah University of Science and Technology

Chapter Chapter 4 in Financial Sector Development in Ghana, 2023, pp 81-103 from Palgrave Macmillan

Abstract: Abstract The importance of well-developed and an inclusive financial sector for effective transmission of monetary policy cannot be overemphasised. This study sought to examine the role of financial inclusion in the effectiveness of monetary policy in Ghana. Monthly time series data from January 2002 to December 2018 was employed for the study. The study found that high levels of inclusion in Ghana’s financial space is essential to increasing the sensitivity of inflation and output to interest rate changes. Thus, making financial inclusion a key requirement for the effectiveness of monetary policy in Ghana is crucial. These results imply that the Central Bank must always consider the level financial inclusion when making monetary policy decisions.

Keywords: Financial inclusion; Monetary policy effectiveness; Inflation; Interest rate (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:pal:pmschp:978-3-031-09345-6_4

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DOI: 10.1007/978-3-031-09345-6_4

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