AN ASSESSMENT OF MONETARY POLICY AS REGULATORY TOOL FOR ECONOMIC DEVELOPMENT IN NIGERIA
AN ASSESSMENT OF MONETARY POLICY AS REGULATORY TOOL FOR ECONOMIC DEVELOPMENT IN NIGERIA
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Date
2005-10
Authors
MUTUAH, LABARI JEROME
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Abstract
The responsibility of maintaining a sound financial structure in the
economy involves on the Central Bank. The Central Bank occupies a
unique position in the financial system of the country. It has revolved a
number of enduring relationship with commercial banks and the banking
sub sector comprising mainly merchant and development banks and the
non-bank sector which is made up of a wide range of organizations
operation as regulators, facilitators and investors such as the Security and
Exchange Commission (SEC), the stock exchange, stock brokers,
insurance companies, National Provident funds etc.
After the formation of monetary policy and the acceptance of this by
the government through its budgetary pronouncement, the Central Bank
organizes the execution of the policies. The CBN gives the directive to
financial institutions which may take the form of monetary policy circular
issued by the governor of the Central Bank as the beginning of every
financial year and subsequently supplemented by some such as exchange
control circular as circumstance may demand.
As part of its responsibility for promoting a sound banking
structure, the monetary policy ensure that the banking industry operates
strictly within the provision of the law and regulations laid down. The
CBN also processes the statutory power to deal with those banks that have
persistently failed to observe the regulatory issued by the CBN.
Responding to the needs of the ever changing economy, the Central
Bank realizing that the application of its traditional instrument of control
of the banking industry has not produced the expected goal resorted to
direct control through monetary policy guidelines, this aspect to its control
started in 1969 after some year of experience of its attempt to control the
baking industry.
The traditional function to the Central Bank include the issue of
legal tender currency, formulation and execution of monetary policies,
maintenance of external reserves so as to safeguard the international value
of the country’s currency, the promotion of monetary stability and a sound
financial structure in the country as well as bankers and financial adviser
to the federal government.
In view of the economic recovery programme, the Central Bank
plays the role of implementing modalities for exchange rate policy, foreign
exchange management, external reforms the Central Bank also offers
advise to government in areas such as fiscal, external trade and other
public sector policies
Description
BEING A PROJECT SUBMITTED TO THE POSTGRADUATE
SCHOOL IN PARTIAL FULFILLMENT OF THE REQUIREMENT
FOR THE AWARD OF THE DEGREE OF MASTER OF BUSINESS
ADMINISTRATION (MBA) OF AHMADU BELLO UNIVERSITY,
ZARIA.
DEPARTMENT OF BUSINESS ADMINISTRATION,
FACULTY OF ADMINISTRATION
AHMADU BELLO UNIVERSITY,
ZARIA.
OCTOBER 2005
Keywords
ASSESSMENT,, MONETARY,, POLICY,, REGULATORY,, TOOL,, ECONOMIC,, DEVELOPMENT,, NIGERIA