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Monetary Policy And Inflation In Nigeria Pdf

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Broad money supply has no major impact on the rate of inflation 3. The Exchange rate movement has no significant effect in checking a spike in the inflation rate for the period under study 3. The Monetary policy rate has no significant effect on the rate of inflation 3.

Monetary policy is a central bank's actions and communications that manage the money supply. The money supply includes forms of credit, cash, checks, and money market mutual funds. The most important of these forms of money is credit. Credit includes loans, bonds, and mortgages. Monetary policy increases liquidity to create economic growth.

Monetary Policy and its Effects on Inflation in Nigeria 2009 - 2014

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Impact of Monetary Policy on Inflation Control in Nigeria

This paper examines the effectiveness monetary policy as an anti-inflationary measure in Nigeria. The unit roots test shows that all the variables are differenced stationary. The cointegration test indicates a long-run relationship between inflation and the vector of regressors employed. The estimated result reveals that for the period covered, interest rate, exchange rate, money supply and oil-price are the major causes of inflation in Nigeria. It was also observed that although in the short-run increased in income encourages inflation, proper utilization of the growth would reduce inflation. The Money supply variable shows a significant positive impact on inflation both in short and long runs. This means that Nigerian inflationary situation is driven by monetary impulses.


PDF | This study examines the effectiveness of monetary policy in controlling inflation in the Nigerian economy using a data-rich framework.


Acta Universitatis Danubius. Œconomica, Vol 12, No 5 (2016)

Monetary policy is the policy adopted by the monetary authority of a nation to control either the interest rate payable for very short-term borrowing borrowing by banks from each other to meet their short-term needs or the money supply , often as an attempt to reduce inflation or the interest rate , to ensure price stability and general trust of the value and stability of the nation's currency. Monetary policy is a modification of the supply of money, i. This is in contrast to fiscal policy , which relies on taxation , government spending , and government borrowing [4] as methods for a government to manage business cycle phenomena such as recessions.

Monetary policy

Use of this Web site signifies your agreement to the terms and conditions. Special Issues. Contact Us. Change code. American Journal of Theoretical and Applied Business. This paper examined the effectiveness of a monetary-fiscal coordination in inflation targeting in Nigeria for the period to The study got its inspiration from the monetarist assertion that inflation is strictly a monetary phenomenon.

Economic theory suggests that monetary policy can be used to stabilize an economy. However, the ability of monetary policy targets—interest rates and money supply—to stabilize an economy depends on their ability to achieve price stability. Using data from to and applying the vector error correction model, this paper seeks to determine how the changes in the inflation rate affect the ability of monetary policy tools to stabilize the Nigerian economy and stimulate investment. Empirical results suggest that the impact of the interest rates on investment depends on the level of the inflation rate. The size of the effect of interest rates on investment gets weaker as the inflation rate increases suggesting that monetary policy tools, such as the monetary policy rate MPR , that directly change the interest rates are robust stabilization tools during periods of declining inflation rates but not relevant during periods of rising inflation rates. This is attributable to low bank lending rates.

Inflation is a major problem facing Nigeria as a country today. This has led to reduction in the standard of living of Nigerians. The Central Bank of Nigeria CBN , however, has made efforts to fight it using different policy measures, of which monetary policy is one of them. Thus this paper focuses on the use of monetary policy to check inflation in Nigeria. The study is based on time series data from to Employing the method of Ordinary Least Squares OLS to estimate the model results, the study found that bank rate, deposit with the central bank, liquidity ratio, and broad money supply are statistically significant in explaining changes in inflation.


PDF | This study examined the effectiveness of monetary policy and control of inflation in Nigeria. The study adopted Augmented Dickey-Fuller.


Monetary policy

Following the COVID impact on the global economy, several countries around the world including the United States, Canada, Russia and the United Kingdom and Nigeria, among others have embarked on rate cuts this year. The last time Nigeria recorded a single-digit inflation rate was in January and it was 9. Governor Emefiele also stressed the lack of fiscal support, which probably provided additional impetus for rate cut. How Africa can navigate the pandemic.

The Main Determinants of Inflation in Nigeria

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The Main Determinants of Inflation in Nigeria

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Monetary policy

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2 Comments

Erutfichab1966 24.03.2021 at 08:50

This paper analyzes the dominant factors influencing inflation in Nigeria.

Jonathan B. 30.03.2021 at 17:09

Keywords: CBN, ECM, exchange rate, inflation rate, monetary policy rate, money supply. Hence, Nigeria's inflationary situatiation is driven by monetary.

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