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The Conduct of Monetary Policy
The Performance of Monetary Policy In 1990
The focus of policies in 1990 remained the moderation of inflation, stimulation of the private sector output, minimization of unemployment as well as reduction of pressure on the external sector. The stance of monetary policy during the year remained moderately restrictive. The monetary and credit targets were set for M1 as 13.0 percent, Credit to government was set at 10.9 percent, and credit to private sector 15.8 percent.
The performance of monetary policy was weak as the growth in M1 substantially exceeded the 13.0 percent target for the fiscal year while credit to the private sector increased by 18.4 percent as against the target of 15.8 percent. The net credit claim on government increased to 14.9 percent compared to the decline of 33.5 percent in 1989. Overall, the Nigerian economy was more stable in 1990, than in the preceding two years. This was due to the continued implementation of appropriate macroeconomic policies during the period. The growth in domestic output was sustained, while the rate of inflation declined sharply from 50.5 percent in the previous year to 7.5 percent. Pressure from the external sector eased further with the over all balance of payments recording a surplus. The stock of external assets increased by 91.2 percent to further enhance confidence in the external sector.