ABSTRACT
The purpose of this
study is to determine the impact of monetary policy on foreign trade financing.
To do this data were collected from both primary and secondary source. Primary
sources include CBN Officials while secondary sources include textbooks,
journals etc. the major instrument for data collected is the questionnaire, the
data are presented in table and analyzed with chi-square. Having analyzed the
data, the following finding were made.
1. There
is an extent to which monetary policies have been effective in financing
foreign trade.
2. There
is factors militating against the effectiveness of monetary policies in Nigeria
foreign trade activities. The study draws the following conclusions.
CHAPTER ONE
Introduction
1.1 Problem
identification
1.2 Rationale
of
study
1.3 Significance
of the
study
1.4 Background
of the
study.
1.5 Definition
of terms.
CHAPTER TWO
Literature
review
2.1 .
Theoretical
review
2.2. Empirical
review
CHAPTER THREE
Hypothesis, methodology
of the study, sources
of data and limitation
of the
study.
3.1 Hypothesis
3.2 Methodology
of the
study
3.3 Sources
of
data
3.4 Limitation
of the study
CHAPTER FOUR
4.0 Data
presentation, analysis and discussion of the result.
4.1
data
presentation
4.2 Analysis
of data
4.3 Discussion
of the
result
CHAPTER
FIVE
Summary, conclusion,
recommendation.
5.1 Summary
5.2 Conclusion
5.3 Recommendation
5.4 Suggestion
for further
studies.
Bibliography.
Appendix
CHAPTER ONE
INTRODUCTION
1.1 PROBLEM
IDENTIFICATION.
A number of monetary and
Economic policy measures have been included in the Nigerian Economic since the
1980’s not only to achieve macro-economic stability but also to enhance foreign
trade financing. But unfortunately, these policy measure have resulted in
inflationary pressure, depreciated foreign exchange rate increasing foreign
debt and deficit balance of payment (Ogwuma 1997).
Consequently the cost of
foreign exchange has risen astronomically while foreign exchange inflow has
dwindled significantly. This situation has mounted pressure on foreign exchange
budget and adversely affected the financing of foreign trade.
The aim of the study is
to examine the effect of the monetary policy on the finance of foreign trade
thus;
1. To
determine the impact of monetary policy in financing foreign trade.
2. To
determine the extent to which monetary policies have been effective in
financing foreign trade.
3. To
identify the factors militating against the effectiveness of monetary policies
in Nigeria’s foreign trade activities.
1.2 RATIONALE
OF THE STUDY.
This work is selected for the view of finding
the ways by which foreign trade can be financed and improved through the help
of monetary policy measures. The adjustment of the monetary policy of Nation
plays a very important role in the finance of its foreign trade.
The monetary policy affects foreign trade financing through guiding
deregulation of foreign exchange market, inter-bank lending, monetization of
foreign exchange earning for petroleum export devaluation and domestic
price stabilization. The study is relevant for numerous reasons. Foreign trade
play a very important role in any country’s economy and any distortion is bound
to have a ripple effect on the economy to avoid such distortions. The
Government (through the central bank of Nigeria) need to know how well their
monetary policies measures is use, whether it is achieving the desired
objective of stabilizing the affairs of the Economy and improving the finance
of foreign trade.
1.3 SIGNIFICANCE
OF THE STUDY.
This study will be of
immense help to the federal Government as it will expose to them the various
monetary policy to be adopted in order to achieve a good or favourable foreign
trade.
To the General Public and Financial Institution, this study will help them
realize the needs to improve on the finance of foreign trade.
Finally, the study will aid researcher who might went to research further into
this topic or those doing research in related topics a basis for further
studies.
1.2 RATIONALE
OF THE STUDY.
This work is selected
for the view of finding the ways by which foreign trade can be finance
and improve through the help of monetary policies measures. The
adjustment of the monetary policy of a Nation plays a very important role in
the finance of its foreign trade.
The monetary policy affects foreign trade financing through guiding
deregulation of foreign exchange market, Inter – bank lending, monetization of
foreign exchange earning from petroleum export devaluation and domestic price
stabilization.
1.3 SIGNIFICANT
OF THE STUDY.
This study is relevant
for numerous reasons foreign trade play a very important role in nay country’s
economy and any distortion is bound to have a ripple effect on the economy to
avoid such distortions. This study will be of immense help to the federal
Government as it will expose to them the various monetary policy to be
adopted in order to achieve a good or favourable foreign trade.
To the General public and financial Institution, this study will help them
realize the needs to improve on the finance of foreign trade.
Finally, the study will aid researcher who might went to research further into
this topic or those doing research in related topics a basis for further
studies.
1.4 BACKGROUND
OF THE STUDY
Government adopts
various economic policies which are implemented in the economy in order
to influence economic activities. In doing this, the aim of the government is
to achieve some target considered desirable for the economy. Usually, such
economic included the monetary designed to achieve macro- economic stability
and even to promote economic growth (Ogbonna 1997).
Anyanuwokoro (1999; 163) defines monetary policy as a combination of measures
designed to regulate the value, supply and the cost of money in an Economy.
Since the early 1980’s,
many developing countries have been witnessing deterioration in their balance
of payment partly because of huge foreign trade deficits. Consequently,
these countries including Nig have adopted various monetary policies in
order to finance their foreign trade instead of restoring to foreign borrowing
(Onah, 1997. 16).
In Nigeria, the monetary policy measure aim at reducing inflationary pressure,
strengthen the exchange rate of the naira improve the balance of payment
position and increase foreign exchange inflow for the financing of foreign
trade (Nwankwo 1998).
Prior to the
introduction of the structural adjustment programme (SAP) in the second – half
of the 1980’s the Federal Government adopted a policy of trade liberalization
and encouraged massive importation of goods and services. To this end, the
monetary policy in operations facilitated foreign trade through adequate
foreign exchange constraints and the over-valuation of the naira led to the
introduction of structural Adjustment programme (SAP) which severely
affected foreign trade financing (Ekamem 2001).
For most of the 1990’s trade and exchange policy measure reflected prudent
monetary policies. The operations of the domiciliary account scheme was to
encourage foreign exchange inflation, stop subsidized funding of post
second-tier foreign exchange market transaction and grant more fiscal
concession on exports. So far, there has been persistent pressure on the
balance of payment and this calls for an investigation into the role of
monetary policies in this connection. It is against this background that this
study is set to examine the impact of monetary policies on foreign trade
financing.
1.5 DEFINITION
OF TERMS
The following terms used
in the study are defined for readers not to misunderstand the contents;-
Monetary policy;-
This is the use of
monetary instruments to influence the cost, value and supply of money and
hence, economic activities, Or the effort by the monetary authorities (the CBN)
to control the money supply and credit conditions for the purpose of achieving
certain bread economic objective.
MONETARY INSTRUMENTS
This includes all the
techniques used by the central bank to control the volume of money in
circulation.
BALANCE OF PAYMENTS
This is the record of
the sum total of a country’s economic transaction with the rest of the world
over a given period of time.
MONETARY POLICY
INDICATORS.
This refer to the index
of the effect of current policy.
INFLATION.
This is the sustained
rising trend in the general price level.
FOREIGN EXCHANGE
This refers to foreign
currency.
FOREIGN EXCHANGE RATE;-
This is the exchange
value of a national currency in terms of other national currency.-
| Department | Banking and Finance |
| Project ID Code | BFN0200 |
| Chapters | 5 Chapters |
| No of Pages | 48 pages |
| Methodology | Chi Square |
| Reference | YES |
| Format | Microsoft Word |
| Price | ₦4000, $15 |
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| Contact Us On | +2347043069458 |