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(
    [id] => 7923
    [paper_index] => EW201809-01-002535
    [title] => MONETARY POLICY TOOLS AND BANKING SECTOR EFFICIENCY IN KENYA
    [description] => <ol>
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</ol>

    [author] => Evans Kiganda Ovamba
    [googlescholar] => https://scholar.google.co.in/citations?user=KeqZGcIAAAAJ&hl=en
    [doi] => 
    [year] => 2018
    [month] => September
    [volume] => 6
    [issue] => 9
    [file] => eprapub/EW201809-01-002535.pdf
    [abstract] => <p>Analysis of bank interest rate spreads is central to the understanding of the banking system efficiency and the macroeconomic environment in which banks operate. Interest rate spreads in Kenya has remained above 8.5% and has been rising over years from 2014, this is indicative of deteriorating banking system efficiency in Kenya over years which may be attributed to lack of knowledge on the effective monetary policy tools for remedying the problem. This study therefore investigated the effect of monetary policy on banking sector efficiency in Kenya. Specific objectives were to establish the effect of Central Bank Rate (CBR) and open market operations (OMO) on banking sector efficiency in Kenya and establishing the most effective monetary policy tool for influencing banking sector efficiency in Kenya. A cointegration analysis based on Fully Modified Least Squares (FMOLS) was employed using monthly time series data obtained from Central bank of Kenya (CBK) spanning three years from January 2013 to December 2015. The results indicated that an increase in CBR decreases banking sector efficiency while an increase in repo rate increases banking sector efficiency in Kenya.&nbsp; It was also noted that, CBR was the most effective monetary policy tool for controlling banking sector efficiency in Kenya. The study therefore, recommended that CBK to adopt CBR as the most appropriate tool for influencing banking sector efficiency.</p>

<p><strong>KEYWORDS: </strong>Monetary policy; banking sector efficiency; Kenya, Central Bank Rate</p>

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    [journalname] => EPRA International Journal of Economic and Business Review(JEBR)
    [short_code] => IJES
    [eissn] => 2347-9671 (O), 2349-0187(P)
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