(Banking and Finance)

This research project work was undertaken with a purpose of determining and evaluation of the effect of the Role of Commercial Bank in Achieving Stability in Foreign Exchange.
The effect of the Role of Commercial Bank on the behavioral aspect of management information system are Aggression Avoidance and Projection on the other hand other operational pressures are maintaining the system.  Personal problems in the book-keeping department maintaining book-keeping machines.
Exparching volume of operation’s need to accommodate the increasing volume need to maintain or reduce cost-unsatisfactory output.  Errors in terms of reports and statement delays in work processing needs or system change.
The study has a library research and empirical study.  Additional information were collected from journals bullies text book and newspapers etc.  it was been clear to me from what I found out that the Role of Commercial Bank in Achieving Stability in Foreign Exchange plays a very big positive better information for commercial loan management improve the speed limit & accuracy of services to customers and also provides necessary data input for advanced financial information system.
It leads to problem awareness permits feed back on the implementing of decision.  It support problem analysis and selection of alternatives it influence the choice of the most appropriate option.  Also computer are used in implementing.  Strategies or plans for they can also be used for daring up the budget in constituting investment port failed and in bank’s balance sheet management.
From the work been mentioned above it is quite clear that if Nigeria bank continue to encourage the use of the Role of Commercial Bank in Achieving Stability in foreign exchange would have a better standard of living & the work of science & technology as regards to computer services.
Background of study
Statement of problem
Objective of the study
Significance of the study
The limitation and study
Definition of terms
The literature review
Research design and methodology
Sources of data
Location of data
Method of data collection
Summary findings
1.1              BACKGROUND OF THE STUDY
The goal of every government of any country is to achieve equilibrium in the economic system.  It is therefore very important that the authorities concerned must regulate the system indirectly with the policies.
This necessitates that government of any country must adopt certain economic policies in order to achieve specific macro-economic goals or objectives; some of such major macroeconomic polices include: monetary policy fiscal policies, exchange rate policy.  Most of these polices can only be administered through the agency of commercial banks, which is the pivot of the research work.  In Nigeria, for instance, monetary policy has being conducted under wide ranging economic environment since the establishment of the Central Bank of Nigeria (CBN) over many years ago.
Basically, monetary and fiscal policies adopted by the government of a country is posturing economic development with a view to achieving certain growth, sustainable balance of payment, maintaining a stable exchange rate of international competitive levels, combating inflation, price stability and fall employment.
Monetary policy is defined according to CBN briefs (1994) as the combination of measures designed to regulate the values, supply and cost of money in an economy.  In consonance with the level of economic activities.
Anyanwu (1993;140) refers to monetary policy as a major economic stabilization weapon which involves measures designed to regulate and control the volume, cost, availability and direction of money and credit in an economy to achieve some specified macro-economic policy objective.
Fiscal policy on the other hand, is an attempt by the government using its expenditure and tax policy to shit the aggregate demand and aggregate expenditure functions towards desired positions.  According to Anwanwe (1997:241), fiscal policy is taken to refer to that part of government policies.  Concerning the raising of revenue and deciding or the level and pattern of expenditure for the purchase of influencing economic activities or attaining some desirable macroeconomic good.
The intricacy in handling the monetary and fiscal policies to achieve the desired macro-economic objectives necessitates the need for an independent authority.  So in Nigeria today, the Federal Government is the sole monetary authority, but it has delegated some aspect of the implementation t o bath the Ministry of Finance and Central Bank of Nigeria (CBN) to formulate, execute monetary policy; to promote financial system.  To achieve a desired policy objectives, the CBN is empowered to use monetary policy technique or instruments, and the CBN does most of its functions through the commercial banks.
This technique can be classified into groups: the direct portfolio contrary and indirect portfolio approach.  Indirect portfolio includes: Open Market Operations (OMO), Minimum Reserved requirements, discounts rate mechanism.  While direct instruments includes: selective credit controls, credit ceiling and moral suasion.
Furthermore monetary policy presupposed that there is some relationship between the supply and the demand for money and economic aggregate such as output, income, savings, general price level and investment.  The mix of monetary policy instruments to be used and its effectiveness depend on this relationship.
Monetary policies involves monetary management.  Monetary management according to Ojo (1992:3) is defined as the art of controlling the movement of monetary and credit aggregate in the pursuance of stable price and sustainable economic growth.
Therefore, the Central Bank or the Central Monetary authority must attempt to keep the money supply growing at an appropriate rate to ensure sustainable economic growth, domestic and external stability.
However, in Nigeria, the role of monetary and fiscal policy has in creases tremendously since after independence.  Both civilian and military governments have adopted there polices to achieve micro-macro objectives.  But despite there measures, to suite the constant changes in the economic situation of Nigeria still a lot of problems deviled the economy, ranging from high unemployment, inflation and balance of payments.  This prompted me to research on the topic: “the role of commercial banks in foreign exchange.
1.2              STATEMENT OF PROBLEM
The application of the monetary and fiscal policies by the monetary authorities using the monetary instruments such as Open Market Operation (OMO), Bank reserve ration, etc.  In consonance with the prevailing economic situation is aimed at achieving the macro-economic goals of the country such as full employment, low level of inflation, favourable balance of payments.  But in Nigeria, inspite of these numerous monetary policy measures adopted, the economy still suffers the problem of higher rate of unemployment, inflationary pressure, balance of payment deficit and unstable foreign exchange.
The questions that follows are: how effective are monetary and fiscal policies are in controlling some of these variables, inflation in particular?  Why have monetary and fiscal policies failed in our economy despite that they have worked in other countries?
What may be the reason militating against the effectiveness of the monetary policies?  As the commercial banks are the enzymes used by the CBN in administering economic measures; what can they do to aid in achieving foreign exchange stability?  In view of the above outlined question, this research work will try as much as possible to proffer some answers.
1.3              OBJECTIVES OF THE STUDY
This study aims at finding the following:
i.                    To re-examine the instruments of monetary and fiscal policies and their performance.
ii.                  To examine the major policy objectives and their achievement in the country.
iii.                To appraise some monetary and fiscal policies measures in Nigerian and see how commercial banks respond to their instruction.
iv.                To make recommendation to policymakers.
This research work is significant because it strives to establish the relationship of monetary and fiscal policies and the role commercial bank play in economic stabilization.  It is hoped that this work will enhance and improve the use of monetary and fiscal policies in the realization of macro-micro economic goals associated with economic growth and development.
1.5              DEFINITION OF TERMS
1.         COMMERCIAL BANKS:  Any institution approved by the central government (usually through CBN) to engage in acceptance of deposits, charging of bills of payments, and performance of retail banking operations.
2.         FOREIGN EXCHANGE:   Refers to transactions in international currencies emanating from exchange of goods and services between nations not using common currency.
3.         BALANCE OF PAYMENTS:        This shows the estimates in transaction of a country’s visible and invisible export and import from foreign countries.
4.         MACRO ECONOMIC GOAL:      This refers to the aggregation of all resources within a given country in achieving a stated goal or objective for the economy.
5.         MONETARY INSTRUMENTS:    They are governmental policies/instruments used in the stabilization of the prevailing economic situation.


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