IDEAS home Printed from https://ideas.repec.org/a/bjc/journl/v9y2022i2p53-58.html
   My bibliography  Save this article

Effectiveness of Monetary Policy in Controlling Inflation in Nigeria

Author

Listed:
  • Ogunjinmi Olusola.O.

    (Institute of Youth Studies, Tangaza University College, Catholic University of Eastern Africa)

Abstract

This paper investigated the effectiveness of monetary policy in controlling inflation in Nigeria using secondary annual data spanning from 1981 to 2019. Specifically, the paper examines if there exist any form of relationship between monetary policy and inflation in Nigeria. Money Supply, Treasury Bills Rate, Monetary Policy Rate and Exchange Rate were the variables used in the study to check inflation. The paper employed Johansen cointegration method to check for the long run relationship between the variables. Ordinary Least Square (OLS) was adopted because of its property of Best Linear Unbiased Estimator. The Johansen co- integration test revealed the existence of long-run relationship between the variables. However, the empirical result of the OLS test showed that monetary policy rate, money supply and treasury bill rates exert influence on inflation in Nigeria. While exchange rate depreciation leads to inflationary growth. This result is consistent with the prediction of economic theory. The study therefore concluded that money supply, treasury bills rate, monetary policy and exchange rate had influence on inflation within the period under consideration and recommends that monetary authority should put in place schemes to make them more effective perhaps by offering competitive rates and the nation Nigeria shift from being a consumption driven (import) economy to production based (export) economy for the impacts of these policies to achieve desired results.

Suggested Citation

  • Ogunjinmi Olusola.O., 2022. "Effectiveness of Monetary Policy in Controlling Inflation in Nigeria," International Journal of Research and Scientific Innovation, International Journal of Research and Scientific Innovation (IJRSI), vol. 9(2), pages 53-58, February.
    • Handle: RePEc:bjc:journl:v:9:y:2022:i:2:p:53-58
    as

    Download full text from publisher

    File URL: https://www.rsisinternational.org/journals/ijrsi/digital-library/volume-9-issue-2/53-58.pdf
    Download Restriction: no
    File URL: https://www.rsisinternational.org/virtual-library/papers/effectiveness-of-monetary-policy-in-controlling-inflation-in-nigeria/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Abiola Adeola Kumapayi & Joseph Ufuoma Nana & Bright Onoriode Ohwofasa, 2012. "Impact of Inflation on Monetary Policy and Economic Development in Nigerian, 1980-2010. Evidence from Empirical Data," Asian Journal of Empirical Research, Asian Economic and Social Society, vol. 2(2), pages 28-39, June.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ibrahim Abdulhamid Danlami & Mohamad Helmi Bin Hidthiir & Sallahuddin Hassan, 2019. "Dynamic Analysis of the Effect of Fiscal Deficit on Inflation in Nigeria," Academic Journal of Economic Studies, Faculty of Finance, Banking and Accountancy Bucharest,"Dimitrie Cantemir" Christian University Bucharest, vol. 5(2), pages 159-165, June.
    2. Ibrahim Abdulhamid Danlami & Mohamad Helmi Bin Hidthiir & Sallahuddin Hassan, 2018. "Inflation in Sierra Leone: An Empirical Analysis of the Impact of Interest Rate on Price Level Changes," Academic Journal of Economic Studies, Faculty of Finance, Banking and Accountancy Bucharest,"Dimitrie Cantemir" Christian University Bucharest, vol. 4(4), pages 42-49, December.
    3. Idoko Ahmed Itodo & Seyi Saint Akadiri & Rotimi Mathew Ekundayo, 2017. "Monetary Policy and Price Stability in Nigeria," Academic Journal of Economic Studies, Faculty of Finance, Banking and Accountancy Bucharest,"Dimitrie Cantemir" Christian University Bucharest, vol. 3(2), pages 68-75, June.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bjc:journl:v:9:y:2022:i:2:p:53-58. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Dr. Renu Malsaria (email available below). General contact details of provider: https://rsisinternational.org/journals/ijrsi/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.