CAN WE HAVE A STRONG NAIRA AND A LOW INTEREST RATE AT THE SAME TIME, WHEN INFLATION IS HIGH AND RISING? Exchange, interest and inflation rates are fundamental macroeconomic variables, capable of changing the direction and growth pattern of a country’s economic development and stability. The strength of a country’s currency, including the Nigerian naira, […]
WHY MUST THE CENTRAL BANK FIGHT INFLATION? Central banks the worlds over are obsessed about inflation and, therefore, devote a significant amount of resources at their disposal to fight inflation. Hence, the primary 3 objective of monetary policy is to ensure price stability. The focus on price stability derives from the overwhelming empirical evidence that […]
WHAT IS INFLATION Inflation is one of the most frequently used terms in economic discussions, yet the concept is variously misconstrued. There are various schools of thought on inflation, but there is a consensus among economists that inflation is a continuous rise in the prices. Simply put, inflation depicts an economic situation where there is […]
What is the Monetary Policy Process? The monetary policy process is a fairly complex process involving objectives and targets setting, monetary programming, choice of nominal anchor, policy instruments and the institutional framework for monetary policy implementation as well as communication and evaluation of outcomes. Some of the key activities are briefly discussed below.