:: Central Bank of Nigeria : Monetary Policy Mandate

MPC Mandate

The legal backing for monetary policy by the Bank derives from the various statutes of the bank such as the Central Bank of Nigeria Act of 1958 as amended in CBN Decree No. 24 of 1991, CBN Decree 1993 (Amendment), CBN Decree No. 3 of 1997 (Amendment), CBN Decree No. 4 of 1997 (Amendment), CBN Decree No. 37 of 1998 (Amendment), CBN Decree No. 38 of 1998 (Amendment), CBN Decree 1999 (Amendment) and CBN Act of 2007 (Ammended) which is shown below.

Section 12 Sub-sections (1) to (5), CBN Act of 2007 (Ammended)

In order to facilitate the attainment of price stability and to support the economic policy of the Federal Government, there shall be a Committee of the Bank known as the Monetary Policy Committee (in this Act referred to as “the MPC”)

The MPC shall consist of -

the Governor of the Bank who shall be the Chairman
the four Deputy Governors of the Bank
two members of the Board of Directors of the Bank
three members appointed by the President; and
two members appointed by the Governor

The MPC shall have responsibility within the Bank for formulating monetary and credit policy

The appointment of a member of the MPC pursuant to sub-section 2 (d) and (e) of this section, the remuneration , filling of temporary vacancies, qualification, tenure of office and disqualification shall be subject to the same terms as are stipulated for a Director under sections 10 and 11 of this Act.

The provisions of the Second Schedule to this Act shall have effect with respect to the proceedings of the MPC

Note: Please be informed that the Bank is yet to constitute a new MPC in line with section 12 sub-sections (1) to (5) of the CBN Act 2007 as revealed above.

The conduct of Monetary Policy in Nigeria and all activities of the Central Bank of Nigeria relate with the core mandate of the bank and therefore are best understood from this perspective. Consequently, in pursuance of its functions in compliance with the core mandate, the CBN undertakes monetary policy in order to:

Maintain Nigeria’s external reserves to safeguard the international value of the legal currency.

Promote and maintenance of monetary stability and a sound and efficient financial system in Nigeria.

Act as banker and financial adviser to the Federal Government; and

Act as lender of last resort to banks.

Facts : 1/1/1995

National Clearing System Re-Visited:In January 1995, a revised clearing rule became operational to facilitate effective clearing of financial instruments and shorten the period of clearing. Consequently, inter-state cheque clearing time was reduced from 21 days to 15 days, while intra-state clearing has been reduced from 12 days to 9 days.

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