Foreign exchange, Recession, Economic growth, Monetary policy, Central Bank of Nigeria


Contemporary central bonking in Nigeria is becoming laced with intricacies, and monetary actions impacting every segment of the society. Paradoxically, monetary policy landscape is characterized by complexities and frequent changes in the monetary environment amidst relatively constant monetary instruments. The economic recession witnessed by Nigeria from Q1 to Q4 of 2016 had reinforced the renaissance of primordial and 'nativist' models of unregulated banking arrangement cum investment options via Ponzi schemes and pyramid schemes, flexible exchange rote regime, selected import forex restrictions, calls for unconventional monetary policy with special reference to negative interest rote, central bonk communication and financial stability concern. This catalyzes another seismic rethink in conventional monetary policy management in Nigeria along with policy implication. Nevertheless, the strategic options available to central bonkers in Nigeria ore relatively new and untested in the monetary policy landscape in Nigeria. More worrisome, is the fact thot the current challenges ore incompatible, intertwined and reinforcing. Understanding the current trends and issues bedeviling monetary policy is critical to central bonkers in Nigeria, because, monetary actions premised on faulty theoretical knowledge would further exacerbate rother thon mitigate the already stressed economy with unintended consequences. Therefore, the paper recommends that Central bankers in Nigeria must be abreast of the fundamental implications of the new reality.

Author Bio

The authors are the staff of the Central Bank of Nigeria.

Publication Title

CBN Bullion







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