TABLE OF CONTENT
Title
Page
Certification
Dedication
Acknowledgement
Table
of Content
CHAPTER
ONE INTRODUCTION
1.
1
Background of the Study.
1.2
Statement of the Problems
1.3
Objective of the Study.
1.4
Significance of the Study.
1.5
Scope of the Study.
1.6
Definition of Key Terms.
1.7
Plan of the Study.
CHAPTER
TWO: LITERATURE REVIEW
2.1
Monetary Theories
2.2
Process of Formulation of Monetary Policy.
2.3
The role of Monetary Policy.
2.4
Instrument of Monetary Policy.
2.5
Targets and Indication of Monetary.
CHAPTER
THREE: CASE STUDY AND METHODOLOGY
3.1
Brief History of Central Bank of Nigeria.
3.2
Research Methodology.
3.3
Sources of Data Collection.
3.4
Method of Data Analysis.
CHAPTER
FOUR: DATA PRESENTATION
4.1
Review of Monetary Policy in Nigeria.
4.2
Monetary Policy of year 2001 Fiscal Year.
4.3
Comparing Year 2001 Fiscal Year Monetary Policy.
4.4
Impact of Monetary Policy on Nigeria Financial System.
CHAPTER
FIVE: SUMMARY, CONCLUSION, AND RECOMMENDATIONS.
5.1
Summary
5.2
Conclusion.
5.3
Recommendations.
CHAPTER ONE
1.1
BACKGROUND
OF THE STUDY
The
growing importance of the modern state of ensuring adequate provision for
living and the need for economic growth in large part of the world have
contributed to the entrance of the prestige of monetary policy as an important
instrument of economic policy.
This
write up examine and explain various monetary policy instruments that have been
used in UK since the inception of the central Bank of UK which is the regulator
body used by the federal government to regulate and control the money in
circulation. The policies are designed in an attempt to change the trends of
some monetary.
Variable
in particular and direction so as to induce the desires behavoural change in
the monetary authorities used policies in controlling some major macro-economic
problems now rampart in our society.
One
of the primary responsibilities of any government is to ensure that citizen
attain a high standard of living, the monetary policies consist of action by
government to help accusing economic objectives.
Some
of these objectives are as follows:
i.
Full employment.
ii.
Rapid economic growth and
development.
iii.
Price stability.
iv.
Equality and distribution of
income.
v.
Stable foreign exchange rates.
vi.
Attainment of self reliance in the
economy.
vii.
Correction of balance of payment
deficit.
Any
government whether a developed or a developing country economic objective which
must be economic growth as to maintain the economy at its full potential output
level, the improvement of the function of the economical by restraining excess
demand and inflationary price increase from imposing real cost on society and
the restraint off any tendency of the economy towards a chronic balance of
payment disequilibrum. Therefore, in an effort to achieve these objectives,
government have put in place a number of different policy tools such as
monetary policy that is topic under discussion other policy tools are fiscal
policy, credit policy, foreign trade policy and exchange rate policy.
The
research work will also look into the instrument or weapon of monetary policies
such as open market operation, interest rate, special deposit, reserve
requirement, request and directions and finally given suggestion and
recommendation on how these policies could be effectively used.
1.2
STATEMENT
OF THE RESEARCH PROBLEMS.
Monetary
policy has a major role to play in the Nigeria finance system and the economy
in general.
To
ensure efficient and effective growth in the economy monetary policy must be
allowed to stay for a period of three to four years to ensure stable economy
growth and enhance the control of monetary in the money and capital market.
The
monetary policy when not in good planning and control will contributes to the
inflationary trend of the nation economic although the performance sheet of the
economy shows that economic is on good track but inflation rate continue to
gallop for instance during 1999 fiscal year the rate of inflation stood at 15
percent, in year 2000, it’s reduced again to 0.9 percent at present it as shoot
up to 5.5 percent.
These
have contributed to the poor economic growth in stabilization in the market
system. Inequitable distribution of income the above discussion shows that not
allowing the monetary policy to last for longer period before introducing
another current measure is a problem facing the economic of the country and
also the regulatory body of the policy ought to take caution and exercise
adequate economic skills aim at acquiring the best for the country.
1.3
OBJECTIVES
OF THE STUDY
The
main objective of this study is to indemnify the importance and impact or to
evaluate the role monetary policy and its impact on the financial system.
And
to examine critically the adequate of monetary in UK and the relate the general
theoretic background and establish specific monetary policy indicated by the
structure and character of UK economy.
In
addition, it will also examine the historical potential of contemporary
monetary policy in changing economic circumstance of Nigeria growing effort and
possible prefer suggestions.
1.4
SIGNIFICANCE
OF THE STUDY.
This
research work is important to every sector and everyone within nation.
Economists agree that money plays an important role in the economic development
and growth process of a nation, ever since the days of an ancient Greek
writer-philosophy plato Aristotle and xylophone write dealing with money have
dwelt on the issue of monetary policy. Monetary policy involves some process
which will bring about the growth of the economic, these are the objective of
monetary policy ( the goals of the policy) policy formulation and choice of
policy instrument, policy implementation and policy evaluation / adjustment.
All
these process will bring about great impact on the activities of the financial
institution that helps in the successful execution of the policies through
their dealing with general public the introduction of these policy have
increase the level of activities in the economy.
1.5
SCOPE
OF THE STUDY.
The
research work is designed to cover almost all the area of the goals of monetary
policy and it is instrument. It will deal with the impact trend, and indicator
of various monetary tools been used in Nigeria finance system to the supply of
money and cost is Nigeria banking system.
1.6
PLAN
OF THE STUDY.
In
line with the above discussion, these stages briefly states the outline of the
various chapters in the project work in the light of the above, the project
shall be divided into five chapters in order to achieve the aim of the project
each chapter shall deal with all the important aspect of the topic.
Chapter
one of the report will contain the introduction of the project work by giving
the background of the study statement of problem of study objective of the
study. Significant of the study, scope and limitation of the study and the
organization of the study.
Chapter
two will focus and deals with review of various literature materials on
monetary policy.
Chapter
three will focus on the brief history of the regulatory body of monetary policy
in Nigeria which is the Central bank of UK and the research methodology used.
Chapter
four will analysis stating the information received so far on the monetary that
is the review of monetary policy in UK comparision of current year monetary
policy with previous year and the impact of monetary policy and UK finance
system.
Lastly,
chapter five would cover on will be devoted to summary conclusion are
recommendation.
Through
its influence on aggregate demand and hence on output. This school of thought
even argues that a modest rate of growth because it is only in such
circumstance that the rate of profit would rise and motivation to invest would
increase .
It
is further argued that the use of monetary policy to achieve growth can aid
achievement of some other objective such as full employment.
The
other view on monetary policy is the classical view as defined by Milton,
according to this view monetary policy can not be used to achieve a legal
unemployment which is lower the natural rate of unemployment. However in an
increase in money supply will simply lead to a repetition of the business cycle
which clearly show the rate of stabilization in the economy.
BUSINESS
CYCLE
Keynesian
view is that monetary policy should be directed out interest rates rather than
money supply and that monetary policy should at all times be directed at
interest rate rather than money supply and that monetary policy should at all
times be subsidiary to fiscal.
Policy
the monetarists recommend that control of money supply should be major concern
of the monetary authority. The Keynesian view says since inflation is a sign of
economic over healing and rise in interest rate will tend to cool it down by
checking investment and thence overall demand conversely during the period of
recession economic activities could be stimulated by lowering the interest
rates.
However,
Keynesian argue that monetary policy will be more effective if the authorities
aim to control interest rate directly rather than indirectly through the
monetary supply.
Therefore,
the Keynesian versus monetary debate given the conflicting advice to government
on the role and effectiveness of monetary policy. According to Paul Einzigg,
monetary policy is the attitude of the political authority toward the monetary system of the communicate under the
control.
Declaring
this definition tool vague to be of sufficient practical use, the same write
defined an idea monetary policy as the effort to reduce to a minimum the
disadvantages and increase the advantage resulting from the existence and
operation of monetary system.
M.C
vaish (1981) gave his own definition of monetary policy this is mean/ the
central bank of UK control over the supply and cast of money as an instrument
for achieving the objective of economic policy of the government.
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