1.1 BACKGROUND OF THE STUDY
The objectives of monetary policy include maintenance of relative stability in domestic prices, attainment of a high rate or full employment, achievement of a high rapid and sustainable economic growth, maintenance of balance of payment equilibrium and exchange rate stability. Monetary policy consists of the process of drafting, announcing, and implementing the plan of actions taken by the central bank, currency board, or other competent monetary authority of a country that controls the quantity of money in an economy and the channels by which new money is supplied. Monetary policy consists of management of money supply and interest rates, aimed at achieving macroeconomic objectives such as controlling inflation, consumption, growth, and liquidity. These are achieved by actions such as modifying the interest rate, buying or selling government bonds, regulating foreign exchange rates, and changing the amount of money banks are required to maintain as reserves. Monetary policy is the macroeconomic policy laid down by the central bank. It involves management of money supply and interest rate and is the demand side economic policy used by the government of a country to achieve macroeconomic objectives like inflation, consumption, growth and liquidity. In general term monetary policy refers to a combination of measures designed to regulate the Value, supply and cost of money in an economy in line with the expected level of economic activity. The objectives of monetary policy include price stability, maintenance of balance of payments equilibrium, promotion of employment and output growth as well as sustainable development. These objectives are necessary for a nation to attain internal and external balance and the promotion of long run economic growth. The study seeks to appraise the impact of monetary policy on poverty reduction in Nigeria (2007-2017).
1.2 STATEMENT OF THE PROBLEM
The importance of price stability cannot be overemphasized in a growing economy where investment is required to boost production and economic activity so to enhance employment, price stability, increase standard of living of the people and economic growth. The harmful effect of price volatility which undermines the ability of policy makers to achieve other laudable macroeconomic objectives. Price fluctuation undermines the value and role of money and also deters investment and economic growth. The problem confronting the study is to investigate the impact of monetary policy on poverty reduction in Nigeria (2007-2017).
1.3 OBJECTIVES OF THE STUDY
The Main Objective of the study is to appraise the impact of monetary policy on poverty reduction in Nigeria (2007-2017); The specific objectives include:
- To determine the level of poverty in Nigeria.
- To determine the nature and relevance of monetary policy.
- To determine the impact of monetary policy on poverty reduction in Nigeria (2007-2017).
1.4 RESEARCH QUESTIONS
- What is the level of poverty in Nigeria?
- What is the nature and relevance of monetary policy?
- What is the impact of monetary policy on poverty reduction in Nigeria (2007-2017)?
1.5 STATEMENT OF THE HYPOTHESES
The statement of the hypothesis for the study is stated in Null as follows:
Ho1: The level of poverty in Nigeria is not significant.
Ho2: The impact of monetary policy on poverty reduction between 2007 -2017 in Nigeria is not significant.
1.6 SIGNIFICANCE OF THE STUDY
The study addresses the impact of monetary policy on poverty reduction in Nigeria (2007-2017).
It provides relevant data for the effective formulation and implementation of policies which will further stimulate the economy to economic growth and development.
1.8 LIMITATION OF THE STUDY
The study was confronted with logistics and geographical factors.
1.9 DEFINITION OF TERMS
MONETARY POLICY DEFINED
Monetary policy is the process of controlling the supply, availability, cost of money or rate of interest. Monetary policy is usually used to attain a set of objectives oriented towards the growth and stability of the economy.
EMPLOYMENT RATE DEFINED
This is the percentage of the labor force that is employed and also constitute one of the economic indicators that economists examine to help understand the state of the economy.
UNEMPLOYMENT RATE DEFINED
This constitutes the number of people actively looking for a job as a percentage of the labour force. The unemployment rate is defined as the percentage of unemployed workers in the total labor force. Workers are considered unemployed if they currently do not work, despite the fact that they are able and willing to do so.
TOTAL LABOUR FORCE DEFINED
This consists of all employed and unemployed people within an economy.