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THE IMPACT OF MONETARY POLICY IN NIGERIA BANKING INSTITUTION

CHAPTER ONE

INTRODUCTION

1.1     Background of the Study

Monetary policy is a programme of action undertake by the monetary authorities, generally the central bank, to control and regulate the demand for and supply of money with the public and the public and the flow of credit with view to achieving predetermined macroeconomic goals Currently, monetary policy has been taken to be a very vital measure in controlling the Nigeria economy this is one of the principal functions of the central bank of Nigeria (CBN). The CBN caries out this responsibility on behalf of the federal Government of Nigeria through a process outlined in the central Bank of Nigeria Decree 24, 1991 section 8 sub sections 1 and 2, the Governor shall keep the president informed of the monetary and banking policy pursued or intended to be pursued the Bank. The president after due consideration may, in writing, direct the bank as to monetary and banking policy pursued or intended on the board which shall forthwith take all steps necessary or expedient to give effect there to.

The federal Government have seen economy as a result of unstable exchange rate. Is cobbling, and have decided to improve and maintain to strengthening balance of payment and maintenance of stable domestic price level.

1.2     Statement of the Study

In this report, the impact of monetary policy in Nigeria banking institution will be investigated. The investigation on the impact of this monetary policy in Nigeria banking institutions will enable its complete distribution even to the local communities. It will also enable its ascertainment on the likely problem that will occur on the process of implementing monetary policy. It will also go a long way. Way in making people know how to spend their money.

1.3     Objective of the Study

The objective of this study is to ascertain know the high rate of employment.

1.4     Research Question

For the purpose of this study the following question will guide this work.

How does C.B.N implement their monetary policy

How does the C.B.N uses the monetary policy in controlling the price stability of the state.

How does monetary policy increase the growth of the economic productivity.

1.5     Research Hypothesis

For the purpose of the work, the following hypothesis will be tested.

Null hypothesis; if the impact of monetary affect the banking institution

Alternative hypothesis; if the impact of monetary policy does not affect the banking institution.

1.6     Significance Of The Study

This project proposal is significant in the following ways: To prospective study who wants to know more on the impact of monetary policy in the banking sector. The study will be relevant to those who work in the bank to help them know how impact monetary policy in banking sector. To the Government on how to plan to improve the impact of monetary policy in banking institutions.

Delimitations And Limitation

This study will cover areas of academics, business, Government and banks

1.8   Limitation

A study of this nature cannot be carried out without difficulties in the process. An important constraint is the time constraint. This research proposal work and examination and the research were complied with a very short period of one week. Another constraint is finance, a research of this nature involves adequate search ( raw materials) Lastly, difficulty in securing relevant data for the study

1.9   Definition Of Terms

Monetary Policy: Harry (1962) defines monetary policy as a “policy employing central banks control of the supply money as an instrument of achieving the objectives of general economic policy”.

According to C.B.N brief (1999) monetary policy refers to the combination of measure designed to regulate the value, supply and cost of money in an economy in consonance with the level of economic activity.

Barbara (2006) defined monetary policy as one of the main policy tools used to influence interest rate, inflation and credit availability through changes in supply of money or variable in economy

Falepan (1978) maintain that monetary policy deals with the discretionary control of money supply by the monetary authorities in order to achieve stated or desired economic goals.

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