IIARD International Institute of Academic Research and Development

IIARD INTERNATIONAL JOURNAL OF BANKING AND FINANCE RESEARCH (IJBFR )

E-ISSN 2695-1886
P-ISSN 2672-4979
VOL. 10 NO. 8 2024
DOI: 10.56201/ijbfr.v10.no8.2024.pg91.99

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Linking Artificial Intelligence into Management of Liquidity by Central Bank: An Exploratory Review of Nigerian Financial System

EFUNTADE, Alani Olusegun, Ph.D., EFUNTADE, Olubunmi Omotayo, Ph.D.

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Abstract

This paper explores the use of artificial intelligence (AI) in liquidity management role of Central Bank in Nigerian financial system. This research aims to identify how central bank can leverage AI to improve liquidity management and bolster monetary stability using content and discourse analysis. Deploying discourse analysis method, this article identifies the strengths, weaknesses, opportunities and threats of using AI in liquidity management role of central banking monetary policy. This exploratory study examines optimization algorithms, which involves formulating mathematical optimization models that consider various constraints, objectives, and market conditions to determine the optimal allocation of liquidity resources. In conclusion, while the adoption of AI in liquidity management of central bank monetary policies presents significant opportunities for improving efficiency, accuracy, and risk management, it also poses challenges related to technical expertise, data quality, regulatory compliance, and cybersecurity. Addressing these challenges will be essential for Nigeria to harness the full potential of AI in enhancing financial stability and promoting inclusive economic growth.

keywords:

AI Automation technologies, Data Science, central banking, liquidity management,

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