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Monetary Policy

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The Conduct of Monetary Policy

The Performance of Monetary Policy In 1994
The objectives of monetary policy in 1994 followed government’s broad macroeconomic goals which included among others, to restore macroeconomic stability, stimulate growth in the productive sectors and generally improve confidence in the Nigerian socio-economic environment. Monetary policy focused on the use of market driven instruments and as in the previous four years, the effectiveness of monetary policy was hindered by the pursuit of expansionary fiscal policy.

The outcome of monetary policy was affected by administrative controls which involved the fixing of basic prices such as interest rate and exchange rate at below market levels. The performance of the economy deteriorated in 1994 owing to the disruption caused by the prolonged political crisis and macroeconomic instability, arising from government’s policy of guided deregulation. GDP grew by 1.3 percent, while the inflation rate reached an all time highest of 57.0 percent, Nigeria’s external reserves stood at US$1.66 billion at the end of the year and narrow money (M1) increased by 47.89 per cent compared with a prescribed target of 21.4 per cent, while broad money grew by 39.1 per cent.

Facts : 1/7/1959
Evolution of Departments:At inception, the organisational structure of the CBN was understandably simple consisting of two departments, namely, the General Manager's and the Secretary's Departments, with the appropriate division of labour as then percieved. The General Manager's Department was responsible for all the Department banking, currency issues, debt management and other operational functions of the bank while the Secretary's Department handled the administrative and staff matters, carried out some research into the economic and financial conditions, and collected and analysed relevant statistics for policy formulation.
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