Thesis Abstract

<p> The study examined the impact of monetary policy in stabilizing the Nigeria<br>economy. In the model specified inflation is the regress while cash research<br>requirement, liquidity ratio, money supply, minimum rediscount rate, interest rate<br>are the regressors. The government employs a deliberate manipulation of cost and<br>availability of credit and money to achieve this economic objective. The CBN<br>being the sole regulatory body combines measures designed to regulate the value,<br>supply and cost of money into economic activities. This is what we call monetary<br>policy (CBN Brief 1996/03). It is against this background that the research is<br>carried out to ascertain the effect in the use of monetary policies such as money<br>supply, interest rate, liquidity ratio, minimum rediscount rate, inflation rate and<br>cash reserve requirement to stabilize the Nigeria economy. Also to determine the<br>relationship that exists between the independent variables and dependent variable<br>from the secondary data for the period under study (1980 – 2010). The statistical<br>technique that will be used for this analysis is the ordinary least square technique,<br>with the aid of PC five 8.00 software package. It has been identified that the major<br>problem militating against the poor performance of monetary policy instruments in<br>stabilizing the economic in Nigeria is time – lags which involves policy employed<br>to take many months to achieve its full effects. This research recommends that<br>there should be a reduction in the cost of production and increase the exportation in<br>order to achieve the objectives of naira devaluation in Nigeria and also, central<br>banks should be independent and should be able to achieve its inflation targets and<br>the stabilization of growth rate in money supply. <br></p>

Thesis Overview

<p> INTRODUCTION<br>1.1 BACKGROUND OF THE STUDY<br>Monetary policy is the process by which monetary authority of a country<br>controls the supply of the money that is monetary stock often targeting a rate of<br>interest for the purpose of promoting economic growth and stability.<br>Monetary policy measures are monetary management put in place by the<br>government through the central bank. These measures rely on the control of<br>monetary stocks, that is supply of money in order to influence board macroeconomic<br>objectives which includes price stability, high level of em*loyment<br>sustainable economic growth and balance of payment equilibrium. These board<br>objectives are achieved through the use of appropriate instrument depending on<br>which objective the policy formulated want to achieved and also on the level of<br>development on the economy.<br>11<br>In the application of monetary policy measures as instrument of<br>stabilization, instrument of monetary policy are determined by the nature of the<br>problems to be solved and by this environment in which these problems exist.<br>They are broadly two categories of these instruments VIZ- indirect and direct<br>instruments. INDIRECT INSTRUMENT are usually used in the market based on<br>economic where the quality of money stock can affected through the relationship<br>between supply and resume money as well as the ability of the monetary authority<br>to influence the creation of reserved.<br>The reserved and hence money supply can be affected through the following<br>ways.<br>1. Deposit ratio/change in reserve.<br>2. Change in discount rate.<br>3. Interest rate change.<br>4. Engaging in an open market operation.<br>In an underdeveloped financial institution the instrument of monetary<br>management is largely limited to direct measure which set monetary and credit<br>target at desired levels. The major DIRECT control measure is direct investment<br>12<br>regulation however quantitative ceiling on overall credit operation is also used.<br>These instruments of monetary policy are applied in the achievement of varied<br>objectives.<br>1.2 STATEMENT OF THE PROBLEMS<br>The Nigeria economy has encountered the problem of disequilibrium,<br>inability to mobilize domestic savings and unsatisfactory expansion of domestic<br>output. These problems have consistently and presently done severe damage to<br>Nigeria economy; but most strikingly these problems have continued to play the<br>economy unabated that is, the economy is becoming less strong. It is against the<br>background that the problem of this study has been identified and they are as<br>follows.<br>1. Are monetary policy measures effective as instrument of economic<br>stabilization?<br>1.3 STATEMENT OF OBJECTIVES<br>The objectives of the study are:<br>13<br>i. To analyze the various monetary policy objectives and instrument for the<br>period.<br>ii. To ascertain the level of success of policy measures against desired objects.<br>iii. To identify the factors that tends to hinder the full attainment of desired<br>objectives.<br>iv. To recommend the appropriate policy measures for the achievement of<br>specific objectives as well as recommend solution to problem that hinders<br>the full attachment of such objectives.<br>1.4 STATEMENT OF HYPOTHESISs<br>The following hypothesis is been formulated to guide the study.<br>H0: Monetary policy measures have no impact on the economic stabilization in<br>Nigeria.<br>H1: Monetary policy measures have impact on the economic stabilization in<br>Nigeria <br></p>