Since the rate of interest is the cost of credit. Based on the results, it is seen that change in the money supply will lead to change in the price level.
The growth of m1 which over the period was the intermediate target targets policy increased from the initial target since The bank then operates to restore their equilibrium by extending new loans such new loans create new demand deposit, thus, increasing the money supply m.
For instance, there was a vast number of instruments used in the execution of monetary and banking policies which includes the following: Pest Keynesian, stated that the lost of capital is the main process by which changes in money supply influence the real economy.
As noted earlier, monetary policy refers to the combination of measures designed to regulate Expansionary and concretionary fiscal policy value, supply a cost of money in an economy in consonance with the expected level of economic activity.
This was from a result of the re-inflationary package of the particular year. The examinations and returns from the institutions as well as current economic development permits an evaluations of the extent of compliance with the circular.
For example, inan interest rate rose steeply following the right of transferring public sector deposits from commercial and merchant banks to CBN. The aims of monetary policy are basically to control inflation maintain a health balance of payments position in order to safeguard the external value of the national currency and promote adequate and sustainable level of economic growth and development.
The maintenance of price stability; maintenance of balance of payment equilibrium; attainment of high rate of employment; accelerating the pace of economic growth and development; exchange rate stability and the maintenance of Price Stability.
Nevertheless, the banking sector did not move to the level of sophistication necessary to enable it perform well. Johnsonstates that a good payment system should be able to facilities the settlement of transaction in respect of goods and services as well as debts, increase speed, lowers the cost and risk and grease the engine of growth by providing the necessary momentum for the right level of economic activity through the smothering of transactions and minimizing delays in transaction time and cost.
Monetary policy is a major economic stabilization weapon, which involves measures designed to regulate and control the volume, cost and direction of money and credits in the economy to achieve objectives, which can change from time depending on the economic fortune of a particular country.
The CBN discount window facility continue to be use strictly in line with the banks roles as lender of last resort and signal the direction of change in interest rate movement. Price stability is therefore, necessary not only to remove these vices but also to restore confidence and maintain international competitiveness.
However, the prolonged use of the direct tools have had adverse effects on both the economy and the effectiveness of monetary policy in Nigeria.
Investors tend to prefer short dated claims over longer dated claims. Furthermore, the effectiveness and capacity of the supervisory authorities were beefed up. Consequently, commercial banks, in turn increase their lending rate.Monetary Policy in Nigeria - Developing countries growth policies are better delivered as full packages since fiscal and monetary policies are inextri.
According to Aderibigbe (), monetary policy is a transmission mechanism which operates policy through the effects of interest of credit on economic agents which respond to different yields of various financial assets, level of aggregates demand, exchange rate overall economic activities.
Monetary Policy in Nigeria – The Impact of Monetary Policy on Nigeria’s Economic Growth. Monetary Policy in Nigeria – Developing countries growth policies are better delivered as full packages since fiscal and monetary policies are inextricable, except in terms of the instruments and implementing folsom-orangevalecounseling.comr, monetary policy appears more potent in correcting short term.
According to Aderibigbe (), monetary policy is a transmission mechanism which operates policy through the effects of interest of credit on economic agents which respond to different yields of various financial assets, level of aggregates demand, exchange rate overall economic activities.Download