ABSTRACT

This study seeks to assess the impact of the monetary policy instruments used by the Bank of Sierra Leone in controlling inflation for the period of 12 years starting from 2010 to 2021. In a bid to address the objectives of the study, the secondary data collected were analyzed using Descriptive statistics, Correlation analysis and the multiple linear regressions to test the hypothesis of the study. The study discovered that monetary policy rate, exchange rate and money supply are all having a positive and significant impact in controlling inflation in Sierra Leone. The study therefore recommends that the most appropriate solution to inflation in Sierra Leone is supply management, which entails increase in the domestic production of consumer goods to meet the ever-increasing consumer effective demand.

TABLE OF CONTENTS

CERTIFICATION ii
ACKNOWLEDGEMENT iii
DECLARATION iv
DEDICATION v
LIST OF TABLES vi
LIST OF FIGURES vii
LIST OF ABBREVIATIONS viii
ABSTRACT xii

CHAPTER ONE (1)

1.0 Introduction 1
1.1 Background of the Case Study 3
1.2 Statement of the Problem 3
1.4 Objectives of the Study 5
1.5 Research Questions 5
1.3 Statement of Hypothesis 5
1.6 Significance of the Study 5
1.7 Scope of the study 6
1.8 Delimitation of the Study 6
1.9 Definition of Terms 6
1.10 Organization of the Study 7
1.11 Summary 8

CHAPTER TWO (2)
LITERATURE REVIEW 9

2.0 Introduction 9
2.1 Theoretical Literature 9
2.1.1 The Classical View of Monetary Policy 9
2.1.2 Keynesian View of Monetary Policy 10
2.1.3 The Monetarist View of Monetary Policy 12
2.2 An Overview of Sierra Leone Monetary Policy 13
2.2.1 Administration of Monetary Policy in Sierra Leone 15
2.2.2 Objective of the Bank of Sierra Leone (BSL) Monetary Policy 15
2.2.3 Instrument of Sierra Leone Monetary Policy 17
2.2.4 Monetary Policy Formulation 25
2.2.5 Efficiency of Monetary Policy during Inflation 25
2.2.6 Efficiency of Monetary Policy during Depression 26
2.2.7 Operation of Monetary Policy 26
2.2.8 Inflation in Sierra Leone 28
2.3 Money Supply in the Economy 29
2.3.1 Causes of Inflation 30
2.3.2 Types of Inflation 30
2.3.3 Inflation Rate in Sierra Leone 32
2.3.4 Monetary Policy as a Control Measure on Inflation in Sierra Leone 33
2.3.5 Effect of Inflation 34
2.4 Inflation and Economic Growth 35
2.4.1 Composite Table of GDP and Inflationary Rates (Billions) 35

CHAPTER THREE (3)
RESEARCH METHODOLOGY 37

3.0. Introduction 37
3.1 Research Design 37
3.2 Population and Sampling and sample size 39
3.2.1 Population 39
3.2.2 Sampling 39
3.2.3 Sample size 39
3.3 Data Collection Method. 40
3.4 Data Analysis and Presentation 41
3.5 Ethical Consideration 41
3.6 Chapter Summary 42

CHAPTER FOUR (4)
PRESENTATION AND ANALYSIS OF RESULTS 43

4.0 Introduction 43
4.1 Presentation of Results 43
Table 4.1 Results of the study on Regression Model 44
4.2. Correlation Matrix 45
4.4 Results to Research Questions and Objectives 46
4.3.1 What has been the causes of inflation in Sierra Leone since 2010 to date? 46
4.3.2 Has monetary policy been effective in achieving its objectives? 47
4.3.4 What has been the major monetary policy instruments used to address the problem of inflation? 47

CHAPTER FIVE (5)
SUMMARY, CONCLUSIONS AND RECOMMENDATIONS 48

5.1 Introduction 48
5.1 Summary of Findings 48
5.2 Conclusion 48
5.3 Recommendations 49
REFERENCES 51
APPENDIX - A 54