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LeadAfrik
Advanced · Self-paced2026 Edition

Monetary Policy & Central Banking

What a central bank actually does and why it struggles to do it in a developing economy. The mandate, the transmission mechanism, the operating framework, inflation targeting, exchange-rate management, and the limits imposed by fiscal dominance and shallow markets.

8

Modules

~6h 35m

Reading time

Advanced

Level

Self-paced

Format

§

Syllabus

  1. 01

    What a central bank does

    The mandate, the balance sheet, and the case for independence — the Central Bank of Kenya read against the textbook central bank.

    ~45 minModule 01
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  2. 02

    Money, credit, and the transmission mechanism

    The interest-rate, credit, exchange-rate, and expectations channels — and why each is weaker in an African financial system.

    ~55 minModule 02
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  3. 03

    The operating framework

    The policy rate and the corridor, open-market operations, reserve requirements, and the interbank market that does the work.

    ~50 minModule 03
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  4. 04

    Inflation targeting and its alternatives

    Inflation targeting, monetary targeting, and exchange-rate anchors — and which framework Kenya actually operates.

    ~50 minModule 04
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  5. 05

    The Phillips curve and the output gap

    The short-run trade-off, the role of expectations, and the hard problem of estimating potential output with poor data.

    ~50 minModule 05
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  6. 06

    Exchange-rate management and intervention

    The trilemma, FX reserves, sterilised intervention, and the 'fear of floating' that shapes most emerging-market regimes.

    ~50 minModule 06
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  7. 07

    Financial stability and the macroprudential toolkit

    Lender of last resort, capital and liquidity buffers, and the macroprudential tools added after the global financial crisis.

    ~50 minModule 07
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  8. 08

    The limits of monetary policy in developing economies

    Fiscal dominance, shallow markets, partial dollarisation, and the credibility problem that constrains the whole exercise.

    ~45 minModule 08
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How to use this course

Start with module 01 if the material is new; skip ahead if you have prior exposure. Each module is self-contained but the arc is sequential — the projects in the final module assume the toolkit from modules 1-11. Every module ends with key takeaways and a curated further-reading list with primary sources.