Commodity Prices in NigeriaCommodity Prices in Nigeria

This study delves into the intricate relationship between monetary policy and commodity prices in Nigeria, with a focus on the period between 2000 and 2023. Utilizing a vector utoregression (VAR) model and impulse response functions, this research investigates the dynamic effects of monetary policy tools, including interest rates and money supply, on commodity prices. The findings reveal that monetary policy has a significant impact on commodity prices, with interest rates exhibiting a more pronounced effect. Specifically, an increase in interest rates leads to a decrease in commodity prices, while an expansion in money supply results in an increase in commodity prices. The study's outcomes have profound implications for policymakers, as they underscore the importance of carefully calibrating monetary policy to mitigate inflationary pressures and stabilize commodity prices. Ultimately, this research contributes to the existing literature by providing fresh insights into the monetary policy-commodity price nexus in Nigeria,
and offers valuable recommendations for policymakers seeking to promote economic stability and growth.