The Central Bank Of Nigeria(CBN) has two broad sets of responsibilities. First, the CBN has a legislative mandate to promote a healthy economy--specifically, maximum sustainable employment, stabilize commodities prices, and moderate long-term interest rates. Second, is the responsibility of helping to ensure the stability of the financial system. The CBN should have two broad sets of policy tools: It makes monetary policy, which today we think of primarily in terms of the setting of the overnight interest rate, the federal funds rate. And, second, the CBN has a range of powers with respect to financial institutions, including rule-making powers, supervisory oversight, and a lender-of-last resort function made operational by the CBNs ability to lend through its discount window. The CBN will do best by focusing its monetary policy instruments on achieving its macro-economic goals -price stability and maximum sustainable employment; while using its regulatory, supervisory, and lender-of-last resort powers to help ensure financial stability.
Posted on: Wed, 12 Mar 2014 05:44:07 +0000