Articles

In Nigeria, the major objectives of policy are the attainment of price stability and sustainable economic growth. Associated objectives are those full employment and stable long-term interest rates and real exchange rates. In pursuing these objectives, the CBN recognises the existence of conflict [Read more]

A nominal anchor for monetary policy is a single variable or device which the central bank uses to pin down expectations of private agents about the nominal price level or its path or about what the Bank might do with respect to achieving that path (Krugman, 2003). Generally, the two kinds of nomina [Read more]

Following Nigeria’s exit from the Paris Club, attention was focused on Nigeria’s London Club Debts. Consequently, about US$1.406 billion (N182.78 billion) was paid to exit the London Club debts, while a further US$1.487 billion, to redeem the par bonds between November and December 2006. [Read more]

Until about 1993 when OMO was introduced, the CBN relied almost exclusively on varying combinations of direct instruments of monetary control from time to time. These instruments included: credit ceilings, secretarial credit allocation, interest rate controls, imposition of special deposits, moral s [Read more]

Prior to the banking sector consolidation exercise that was concluded in December 2005, the framework for monetary policy in Nigeria had witnessed some transformation. This included the shift from the use of direct monetary policy control to indirect (market-based) monetary management, and the switc [Read more]

Liquidity management involves the supply/ withdrawal from the market the amount of liquidity consistent with a desired level of short-term interest rates or reserve money. It relies on the daily assessment of the liquidity conditions in the banking system, to determine its liquidity needs and thus t [Read more]

A stable deposit base as opposed to volatile, short-term funds has started to impact positively on interest rates stability. In order to fast track interest rates stability, the CBN introduced a new framework for the implementation of monetary policy in December of 2006. As part of the new framework [Read more]

The institutional set up of the monetary policy process affects the efficacy of monetary policy. In Nigeria, the Monetary Policy Department of the CBN articulates the monetary policy framework and produce draft monetary programme which is considered by a Monetary Policy Committee(MPC) . The MPC also [Read more]

The central bank use monetary policy to achieve the goals of macroeconomic management. Consequently, monetary policy is employed as a tool to control or influence monetary aggregates such as interest rates, money supply and bank credit, including the exchange rate, with a view to achieving set polic [Read more]

The mechanism by which monetary policy is transmitted to the real economy remains a central topic in macroeconomics. The bank lending channel represents the credit view of this mechanism. According to this view, monetary policy works by affecting bank assets (loans) as well as banks’ liabiliti [Read more]