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
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.
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.
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.
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
Background of the study
Statement of problem
Objective of the study
Significance of the study
Scope and limitation of the study
Definition of terms
2.0 Meaning of inflation
Various rate of inflation
Types and causes of inflation
Effects of inflation in the economy
Meaning of monetary policy
Objectives of monetary policy
Instrument of monetary policy
Limitations of monetary policy
Inflation control through use of monetary
3.0 Research design and methodology
Sources of data
Location of data
Method of data collection
Findings and summary
Conclusion and recommendation
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
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,
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
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.
determine the effectiveness of open market operations as a tool for inflation
4. To identify the adverse effect of inflation
on economic growth.
recommend measures for effective control of inflation through monetary
1. Is currency devaluation a cause of
2. To what extent has inflation affected the
is the effectiveness of open market operation as a tool for inflation control?
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).
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.
1.7 LIMITATION OF
cover the forms, rates, effects and control of inflation, which is limited to
the application of the CBN monetary policy. It covers inflation control in
The research is
carried out with available literature review material. There are inadequate
materials, time and space for the collection of data.
1.8 DEFINITION OF
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).
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).
These are instrument of monetary policy,
they include open market operations, legal reserve ratio, bank rate, liquidity
ratio, moral suation, directives, etc (Orjih, 1996).
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).
This is to check, deduct, remedy or combat (Hornby,