MONETARY POLICY MEASURE AS INSTRUMENTS OF ECONOMIC STABILIZATION IN NIGERIA

In general, monetary policy refers to the combination of measures designed to regulates the value, supply and cost of money in an economy in cognizance with the level of economic activity. An express supply of money which will result in an excess demand for goods and services will cause rising prices and or a deterioration of the balance of payments position. On the other hand, inadequate supply of money could induce stagnation in the economy thereby referred growth and development. Consequently, the central bank and the central monetary authority, must attempt to keep the money supply growing at an appropriate rate to ensure sustainable economic growth and to maintain internal and external stability. The discretionary control of the money stock by the central monetary authority involves the expansion or construction of money influencing interest rates to make money cheaper or more expensive depending on the prevailing economic conditions and the channeling of money to priority sector. In a nutshell, the aims of monetary policy are basically to control inflation, maintain a healthy balance of payments position for the country in-order to safeguard the external value of the national currency and promote an adequate and sustainable level of economic growth and development. This study therefore, delves into monetary policy measure with a view to elucidating their effectiveness as instruments of economic stabilization in Nigeria.