COMESA Monetary Institute has trained staff of Central Banks from the COMESA region on “Practical application of Bayesian Vector Auto Regressions (BAVR) Approach to the analysis of Monetary Policy Transmission Mechanism”.

The training took place from 2nd to 6th August 2021 with 29 delegates from seven Central Banks of COMESA Member States participating, namely Democratic Republic of Congo, Egypt, Kenya, Madagascar, Malawi, Mauritius and Zimbabwe were represented.

The training familiarized participants with the tool- kit of Bayesian Vector Auto Regressions (VAR) approach to the analysis of monetary policy transmission mechanism. It focused on the interdependencies among key macroeconomic variables and the feedback effects thereof.

Participants were also trained on a step-by-step approach in the deployment of the Bayesian VAR approach to the analysis of monetary policy transmission mechanism using COMESA data on real and price variables.

The training was motivated by the developments in the analysis of monetary policy transmission mechanism, based on the Bayesian VAR approach, which is fast gaining traction in recent years for the following key reasons. It is more adept at dealing with different data sources or incorporating information from other studies; is precise at parameter estimates; has limited mathematical complexities; and it produces more efficient forecasts.

Director of the CMI Mr Ibrahim Zeidy said the training would enable the participants to share knowledge and experiences and enhance capacity to conduct analytical works in monetary policy analysis and forecasting.

“The BVAR is an important addition to the suit of analytical tools that COMESA member countries can use to unravel the channels through which monetary policy is most effective,” he said.