CHAPTER ONE
1.1 INTRODUCTION
In the past year, the Nigeria economy has witness serious micro economy problem, characterized by show in the economic activities, how capacity utilization growing unemployment level debt burden, accelerated inflation intensify exchange rate separation as well as higher perfect receiving of interest rate persistently high and government deficit financing has been identified as the major factors in the observed micro economy problems.
When we talk of micro economy policies, this deals with monetary and physical policies, but this concerned mainly on monetary policies.
Therefore, monetary policies comprises of those policies desired to influence the behaviors of micro economy preferably the basic aim of the monetary policy are not the monetary aggregate themselves, but the aggregate in the real sector of the economy such as level of output, stabilization and the economy development.
The policies are designed in an items to charge the trend of some monetary variable in particular direction so as to infuse the desire behavioral change in the monetary policies the bank role is to conduct appropriate monetary policies that is consistence with the main economy objective of achieving real growth in gross domestic product, low inflation rate and satiable balance of payment position.

This irrespective of whether the direct or indirect approach is put in place to control money and crudity.
In this regard, the CBN clatter the amount of monetary supply that is consistent with the country micro economy objective and manipulated the monetary instrument at his disposal in order to achieve the state objectives.
Monetary policy is use to influence the macroeconomic objective because there is believe that this occur in relationship between the trace variable at the monetary variables.
From the above explanation monetary policy could therefore be define as a delicate action taken by monetary authorities to change the domestic stock of money supply while fiscal policy variable teaming constant.
Monetary policy influences the level of aggregate income and spending in the economy by influence money supply and the cost of borrowing money from the bank.

It could also be defined as a policy employing the central bank.

It could also be defined as an instrument for achieving the objective of a general economic policy or as a tool use by the monetary authority in other to achieve state economic objectives.

1.2 STATEMENT OF THE PROBLEM
Despite the impact which monetary policy has played in the Nigeria financial institution, a lot of problems still control the monetary policy and their client and this study therefore carried out to investigate such problem like:
1. Expansion of more commercial bank and liquidation of most financial institution in Nigeria.
2. Monetary supply is not controlled in line with the demand in the real sector which heads to a situation of disequilibrium.
3. This is adverse effect on recent banking regulation of the liquidity and profitability objective of banking too low of money supply which leads to hinder of investment.
4. There is a large non-monetized sector which hinders the success of monetary policy in such countries – people mostly live in rural areas where barter is practiced.
5. Monetary policy is also not successful in such countries because bank money comprises a small proportion of the total money supply in the country.
1.3 RESEARCH QUESTION
1. Does your bank grants loan and advances to their customers?
2. What is the type of loan given out mostly?
3. Who is responsible for giving out of loan?
4. Do you think that granting of loan and advances to customers have any positive effect on the economy?
5. Do you think increasing the rate of granting credit facilities help in improving the economy?
6. Does your bank have credit control and management?
7. How efficient is the credit management and control department?
1.4 OBJECTIVES OF THE STUDY
The main objective of the study is to identify the source of monetary policy and its impact on Nigeria financial institution.
1. To ensure domestic price stability
2. To avoid unnecessary fluctuation in income and employment.
3. To stimulate economy growth by avoiding miss-allocation of resources
4. To maintain healthy balance of payment equilibrium.
5. To maintain full employment
6. To create a broad and continues for government securities
7. To provide a credit at differential interest to economically weaker section of the community.
8. To help in the establishment and development of tern financing institution
1.5 RESEARCH HYPOTHESIS
It is hypothesis that the monetary policy ia a policy document designed to reputation and control the volume cost available and directions of money and credit in economic policy objectives the following hypothesis will be used.
1. Ho: open market operation has no effect on monetary policy of CBN
2. Hi: open market operation has effect on monetary policy of CBN
1.6 SIGNIFICANT OF THE STUDY
Presently, the business environment economy as well as banking industry as experience massive benefits from the introduction of monetary policy at an appropriate level to ensure sustainable economy growth and maintain internal and external stability.
The following people will be benefited from the significant of monetary policy in an economy.