The Effect Of Macroeconomic Indicators On Economic Growth On A Petrol Dollar Economy Essay

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THE EFFECT OF MACROECONOMIC INDICATORS ON ECONOMIC GROWTH IN A PETROL-DOLLAR ECONOMY: THE NIGERIAN EXPERIENCE

1. Introduction
The Central Bank of Nigeria Act of 1958(CBN) vested the monetary policy powers of economic stability on the apex regulatory bank (CBN).Since our independence in 1960,CBN has operated a fixed exchange regime which was at various times was at par with the British pounds and later the United States Dollar. This exchange rate regime was operated in addition to administrative controls on foreign exchange to ensure macroeconomic goals of government are achieved.
Exchange rate volatility became problematic following the breakdown of the Breton Woods negotiations in 1973 which led to flexible exchange rate among world currencies. Countries tried to establish exchange rates with trading partners whom they have bilateral and multilateral trade agreements with.
A watershed in exchange rate policy was achieved in 1978, as CBN pegged the Nigeria Naira to 12 currencies of her major trading partners. This lofty objective was short-lived as the oil-glut of the 1980s in the international oil market led to inability of the Federal Government to meet international financial commitment.
Monetary policy is the process the government uses through the apex bank (CBN) to control the supply of money of money, availability of money and cost of money or rate of interest in order to attain a set of objectives oriented towards the growth and stability of

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