+234 813 0686 500
+234 809 3423 853
info@grossarchive.com

THE EFFECT OF MONETARY POLICY ON THE FINANCE OF FOREIGN TRADE

  • Type:Project
  • Chapters:5
  • Pages:48
  • Format:Microsoft Word
(Banking and Finance Project Topics & Materials)

THE EFFECT OF MONETARY POLICY ON THE FINANCE OF FOREIGN TRADE.

ABSTRACT

The purpose of this study is to determine the impact of monetary policy on foreign trade financing. To do this data were collected from both primary and secondary source. Primary sources include CBN Officials while secondary sources include textbooks, journals etc. the major instrument for data collected is the questionnaire, the data are presented in table and analyzed with chi-square. Having analyzed the data, the following finding were made.

1.                  There is an extent to which monetary policies have been effective in financing foreign trade.

2.                  There is factors militating against the effectiveness of monetary policies in Nigeria foreign trade activities. The study draws the following conclusions.

CHAPTER ONE

Introduction                                                                           

1.1              Problem identification                                               

1.2              Rationale of study                                                     

1.3              Significance of the study                                                       

1.4              Background of the study.                                          

1.5              Definition of terms.                                       

CHAPTER TWO

Literature review                                                                    

2.1  .     Theoretical review                                                      

2.2.            Empirical review                                                        

CHAPTER THREE

Hypothesis, methodology of the study, sources

of data and limitation of the study.                                       

3.1              Hypothesis                                                                 

3.2              Methodology of the study                             

3.3              Sources of data                                                          

3.4              Limitation of the study                                              

CHAPTER FOUR

4.0              Data presentation, analysis and discussion of the result.

4.1       data presentation                                                        

4.2              Analysis of data                                                                     

4.3              Discussion of the result                                                          

CHAPTER FIVE    

Summary, conclusion, recommendation.                               

5.1              Summary                                                                                

5.2              Conclusion                                                                 

5.3              Recommendation                                                                   

5.4              Suggestion for further studies.                                              

Bibliography.                                                 

Appendix                                                                   

CHAPTER ONE

INTRODUCTION

1.1              PROBLEM IDENTIFICATION.

A number of monetary and Economic policy measures have been included in the Nigerian Economic since the 1980’s not only to achieve macro-economic stability but also to enhance foreign trade financing. But unfortunately, these policy measure have resulted in inflationary pressure, depreciated foreign exchange rate increasing foreign debt and deficit balance of payment (Ogwuma 1997).

Consequently the cost of foreign exchange has risen astronomically while foreign exchange inflow has dwindled significantly. This situation has mounted pressure on foreign exchange budget and adversely affected the financing of foreign trade.

The aim of the study is to examine the effect of the monetary policy on the finance of foreign trade thus;

1.                  To determine the impact of monetary policy in financing foreign trade.

2.                  To determine the extent to which monetary policies have been effective in financing foreign trade.

3.                  To identify the factors militating against the effectiveness of monetary policies in Nigeria’s foreign trade activities.

1.2              RATIONALE OF THE STUDY.

This work is selected for the view of finding the ways by which foreign trade can be financed and improved through the help of monetary policy measures. The adjustment of the monetary policy of Nation plays a very important role in the finance of its foreign trade.

            The monetary policy affects foreign trade financing through guiding deregulation of foreign exchange market, inter-bank lending, monetization of foreign exchange earning for petroleum  export devaluation and domestic price stabilization. The study is relevant for numerous reasons. Foreign trade play a very important role in any country’s economy and any distortion is bound to have a ripple effect on the economy to avoid such distortions. The Government (through the central bank of Nigeria) need to know how well their monetary policies measures is use, whether it is achieving the desired objective of stabilizing the affairs of the Economy and improving the finance of foreign trade.

1.3              SIGNIFICANCE OF THE STUDY.

This study will be of immense help to the federal Government as it will expose to them the various monetary policy to be adopted in order to achieve a good or favourable foreign trade.

            To the General Public and Financial Institution, this study will help them realize the needs to improve on the finance of foreign trade.

            Finally, the study will aid researcher who might went to research further into this topic or those doing research in related topics a basis for further studies.

1.2              RATIONALE OF THE STUDY.

This work is selected for the view of finding the  ways by which foreign trade can be finance and improve through  the help of monetary policies measures. The adjustment of the monetary policy of a Nation plays a very important role in the finance of its foreign trade.

            The monetary policy affects foreign trade financing through guiding deregulation of foreign exchange market, Inter – bank lending, monetization of foreign exchange earning from petroleum export devaluation and domestic price stabilization.

1.3              SIGNIFICANT OF THE STUDY.

This study is relevant for numerous reasons foreign trade play a very important role in nay country’s economy and any distortion is bound to have a ripple effect on the economy to avoid such distortions. This study will be of immense help to the federal Government as it will expose to them  the various monetary policy to be adopted in order to achieve a good or favourable foreign trade.

            To the General public and financial Institution, this study will help them realize the needs to improve on the finance of foreign trade.

            Finally, the study will aid researcher who might went to research further into this topic or those doing research in related topics a basis for further studies.

1.4              BACKGROUND OF THE STUDY

Government adopts various economic policies which  are implemented in the economy in order to influence economic activities. In doing this, the aim of the government is to achieve some target considered desirable for the economy. Usually, such economic included the monetary designed to achieve macro- economic stability and even to promote economic growth (Ogbonna 1997).

            Anyanuwokoro (1999; 163) defines monetary policy as a combination of measures designed to regulate the value, supply and the cost of money in an Economy.

Since the early 1980’s, many developing countries have been witnessing deterioration in their balance of payment partly because of huge foreign trade deficits. Consequently, these  countries including Nig have adopted various monetary policies in order to finance their foreign trade instead of restoring to foreign borrowing (Onah, 1997. 16).

            In Nigeria, the monetary policy measure aim at reducing inflationary pressure, strengthen the exchange rate of the naira improve the balance of payment position and increase foreign exchange inflow for the financing of foreign trade (Nwankwo 1998).

Prior to the introduction of the structural adjustment programme (SAP) in the second – half of the 1980’s the Federal Government adopted a policy of trade liberalization and encouraged massive importation of goods and services. To this end, the monetary policy in operations facilitated foreign trade through adequate foreign exchange constraints and the over-valuation of the naira led to the introduction of structural Adjustment programme  (SAP) which severely affected foreign trade financing (Ekamem 2001).

            For most of the 1990’s trade and exchange policy measure reflected prudent monetary policies. The operations of the domiciliary account scheme was to encourage foreign  exchange inflation, stop subsidized funding of post second-tier foreign exchange market transaction and grant more fiscal concession on exports. So far, there has been persistent pressure on the balance of payment and this calls for an investigation into the role of monetary policies in this connection. It is against this background that this study is set to examine the impact of monetary policies on foreign trade financing.

1.5              DEFINITION OF TERMS

The following terms used in the study are defined for readers not to misunderstand the contents;-

Monetary policy;-

This is the use of monetary instruments to influence the cost, value and supply of money and hence, economic activities, Or the effort by the monetary authorities (the CBN) to control the money supply and credit conditions for the purpose of achieving certain bread economic objective.

MONETARY INSTRUMENTS

This includes all the techniques used by the central bank to control the volume of money in circulation.

BALANCE OF PAYMENTS

This is the record of the sum total of a country’s economic transaction with the rest of the world over a given period of time.

MONETARY POLICY INDICATORS.

This refer to the index of the effect of current policy.

INFLATION.

This is the sustained rising trend in the general price level.

FOREIGN EXCHANGE

This refers to foreign currency.

FOREIGN EXCHANGE RATE;-

This is the exchange value of a national currency in terms of other national currency.-

THE EFFECT OF MONETARY POLICY ON THE FINANCE OF FOREIGN TRADE

Share This

Details

Type Project
Department Banking and Finance
Project ID BFN0736
Price ₦3,000 ($9)
Chapters 5 Chapters
No of Pages 48 Pages
Format Microsoft Word

500
Leave a comment...

    Details

    Type Project
    Department Banking and Finance
    Project ID BFN0736
    Price ₦3,000 ($9)
    Chapters 5 Chapters
    No of Pages 48 Pages
    Format Microsoft Word

    Related Works

    ABSTRACT The purpose of this study is to determine the impact of monetary policy on foreign trade financing. To do this data were collected from both primary and secondary source. Primary sources include CBN Officials while secondary sources include textbooks, journals etc. the major... Continue Reading
    ABSTRACT  This research work examines the impact of monetary policies on foreign trade in Nigeria. The research made use of secondary data which are collected from the Central Bank of Nigeria, Statistical Bulletin (2010). The data were collected for the period of thirty years (i.e.) 981-2010). The study employed quantitative analysis approach.... Continue Reading
    ABSTRACT This project is titled foreign exchange and international trade it’s effect on bank profitability. It examines the extent and effect of foreign presence in domestic banking markets. It investigate how net interest margins, overhead tax paid and profitability... Continue Reading
    ABSTRACT This project is titled foreign exchange and international trade it’s effect on bank profitability. It examines the extent and effect of foreign presence in domestic banking markets. It investigate how net interest margins, overhead tax paid and profitability... Continue Reading
    Abstract Every vibrant foreign policy derives its strength from the domestic angle, that is, from the needs of the country and the populace. For several years past, Africa was the centerpiece of Nigeria’s foreign policy and, therefore, spent heavily pursuing foreign... Continue Reading
    (A STUDY OF FIRST BANK PLC OZORO DELTA STATE) Abstract This study was carried out to highlight the effect of monetary policy on financial institutions in Nigeria particularly reference to first bank plc Ozoro delta state. This project talks about the main reason, features and... Continue Reading
    ABSTRACT The purpose of this project is based on the effect of monetary policy on economic growth in Nigeria. This work discussed the meaning of monetary policy as monetary management techniques put in place by the government through the central bank to control money stock in order to influence broad macro-economic objectives. The data used is a... Continue Reading
    ABSTRACT This research work is geared towards the investigation of the effect of fiscal and monetary policies on commercial bank and other financial institution, government through various agencies issues fiscal and monetary which are assumed to  determine whether these polices have any significant impact on the commercial banks and other... Continue Reading
    CHAPTER ONE <>1.1BACKGROUND OF THE STUDY Monetary policy remain a critical tool in stimulating the growth and stability of financial Institution in most developing Economics. In Nigeria, the objectives usually include promoting monetary stability,... Continue Reading
    ABSTRACT It was discovered that Nigeria as a third world country lacks certain infrastructural facilities necessary for the smooth exportation and importation of goods and services. The research intends to identify and evaluate the utility rendered by the importation and exportation of goods and... Continue Reading