ABSTRACT
Through the instrument
used in monetary policy help us by the control of inflation in an economy. This
is to know the control of inflation using central bank of Nigeria monetary
policy.
Hence, this research
work was focused on the investigation of the control of inflation by using
central bank of Nigeria monetary policy. In carrying out this study, various
research instruments such as questionnaires and oral interviews were used to
collect data from respondents.
The research design and
methodology secondary data was collected from central bank of Nigeria bullion.
Location of data and this was stated in chapter three (3) of the research work
from the data collected and stated it was found out that of the control of
inflation using CBN monetary policy.
The government should
establish firms in the economy to reduce the rate of inflation and opening
market operation. Recommendations were made in chapter five shows that in order
to prevent through currency devaluation, Nigerians should use in manufacturing
capacity labour and skill to take advantage of export opportunity that are
created in international market.
The introduction of the
structural adjustment programme (SAP), in Nigeria had with it seen the need for
efficient and effective management of a firm’s scarce resource, and for this to
be effective.
TABLE OF CONTENT
CHAPTER ONE
1.0
Introduction
1.1 Background
of the study
1.2 Statement
of problem
1.3 Objective
of the study
1.4 Research
question
1.5 Significance
of the study
1.6 Scope
and limitation of the study
1.7 Definition
of terms
CHAPTER TWO
LITERATURE REVIEW
2.0
Meaning of inflation
2.1 Various
rate of inflation
2.2 Types
and causes of inflation
2.3 Effects
of inflation in the economy
2.4 Meaning
of monetary policy
2.5 Objectives
of monetary policy
2.6 Instrument
of monetary policy
2.7 Limitations
of monetary policy
2.8 Inflation
control through use of monetary policy
CHAPTER THREE
3.0
Research design and methodology
3.1 Sources
of data
3.2 Secondary
data
3.3 Location
of data
3.4 Method
of data collection
CHAPTER FOUR
4.0 Findings
and summary
CHAPTER FIVE
5.0 Conclusion
and recommendation
REFERENCE
BIBLIOGRAPHY
CHAPTER ONE
1.1 INTRODUCTION
After an appreciated
economic performance in the early 1970s, the Nigerian economy experienced
serious economic problems from late 1970s to mid 1980s the country’s balance of
payment came under severe pressure and was in persistent deficit during the
period. The government’s current expenditure expanded without an appreciable
increase in revenue, leading to widening fiscal deficits, which were largely
financial with bank credit with adverse consequences on the general price
level. The inflationary pressure further appreciated by high demand of imports
and both intermediate inputs and consumer goods due to over valuation of the
naira, which made imports relatively larger than locally manufactured good,
(Ahmed, 1992).
1.0
BACKGROUND OF THE STUDY
In addressing the
crisis, a number of policy measures regularly demand government embarked upon
management. In April 1982, the federal government enacted the economic
stabilization measured, which dealt extensively on import restriction as well
as monetary and fiscal policies. The effectiveness of this measures were
constrained by the continued decline in foreign exchange earnings, the over
valuation of naira and other distortions and liquidities in the economy,
(Ahmed, 1992).
As the demand pressure
movement at the inter-foreign exchange market (IFEM), the exchange rate of the
naira came under renewed pressured in spite of CBN’s determination to fund the
growing demand for foreign exchange. The naira cost 1% of its face value in
February 2002 dropping from N11396 to N114, 75 per
dollar at the official market in the parallel market, it cost 2.3% of its value
as depreciates from N135.52 to N138.68 per dollar. This
was an indication that inflation rat is on the increase (Yansi, 2002).
This study is being
carried out to know the different CBN credit instruments and their
effectiveness in inflationary control.
1.3
STATEMENT OF THE PROBLEM
This research project is
designed to investigate inflation control through the use of monetary policy.
There have been various efforts by the government to combat inflation in the
country. But in spite of all these efforts being made, inflation is said to be
alarming in the country. Nigerian industries as well as individuals are
groaning under the crusting effect of inflation. What the causes of the
phenomenon, what measures are taken so far to combat the situation, are credit
instrument of CBN effective or ineffective in controlling inflation? (Ozo, et
al 1999).
1.4
OBJECTIVES OF THE STUDY
1. To find out whether
currency devaluation is a cause of inflation.
2. To find out the
extent to which inflation has effected the economy.
3. To determine the
effectiveness of open market operations as a tool for inflation control.
4. To identify the
adverse effect of inflation on economic growth.
5. To recommend measures
for effective control of inflation through monetary measures.
1.5
RESEARCH QUESTION
1.
Is currency devaluation a cause of inflation?
2.
To what extent has inflation affected the economy?
3. What is the
effectiveness of open market operation as a tool for inflation control?
1.6
SIGNIFICANCE OF THE STUDY
The study is very
timely, today that inflation trends is at an alarming rate in Nigerian economy.
This study will be of immense benefit to the government and experts and
students to determine the extent of the effect now of CBN monetary policy as a
tool of inflation control. In addition, the study will determine the facts or
problem limiting the effectiveness of these instruments. It is expected that
the findings will help to bridge any gap that may exist and to make this
instruments effective in inflation control (Ozo et al 1999).
The government achieved
its objectives in economic growth and stability through inflation control we
will help the government to know whether to pump money into the economy or not.
1.8
DEFINITION OF TERMS
i. INFLATION
This is defined as a
significant and sustained increase in the general price level (Nwabah, 1995).
It is also an increase in the volume of money and credit relative to available
goods and services resulting in a sustained and continuing rise in the general
price level, (Orjih, 1996).
ii. MONETARY/CREDIT
POLICY
This can be defined as
any consigns action undertaken by the monetary authorities to change the
volume, quantity, availability, cost and direction of money and credit in an
economy. it can also be defined as the credit control measures adopted by
control bodies to control the supply of general economic policy, (Orjih, 1996).
iii. CREDIT
INSTRUMENT
These are instrument of
monetary policy, they include open market operations, legal reserve ratio, bank
rate, liquidity ratio, moral suation, directives, etc (Orjih, 1996).
iv. CENTRAL
BANK OF NIGERIA
This may be defined as
an apex financial institution, which is charged with the responsibility of
managing the cost volume, availability and direction of money and credit in
Nigerian economy with a view to achieving some desired economic objective
(Orjih, 1996).
v. CONTROL
This is to check, deduct, remedy or combat
(Hornby, 1974).
Department | Banking and Finance |
Project ID Code | BFN0227 |
Chapters | 5 Chapters |
No of Pages | 45 pages |
Reference | YES |
Format | Microsoft Word |
Price | ₦4000, $15 |
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Contact Us On | +2347043069458 |