MONETARY POLICY

Nigeria’s economy has been characterized by persistent macroeconomic instability, evident in its high and often volatile inflation rates and alarming unemployment figures. Misery Index in Nigeria, with an empirical focus on Hanke’s Misery Index, over the period 1992–2024. Grounded in the Quantity Theory of Money and the Phillips Curve, the study investigates how changes in money supply, exchange rate volatility, government expenditure, and oil prices influence economic distress. Using annual time series data, the research applies unit root tests to assess stationarity, correlation analysis to explore inter-variable relationships, and the Autoregressive Distributed Lag (ARDL) approach to capture both short- and long-run dynamics. The ARDL bounds test indicates no evidence of long-run cointegration among the variables. Empirical findings reveal that increases in money supply significantly elevate the Misery Index, while exchange rate volatility does not have a significant impact. Lagged government expenditure reduces economic distress, and increase in oil price have a negative but marginally insignificant effect on the Misery Index. The study concludes that coordinated monetary and fiscal policies, informed by both inflation-output trade-offs and money supply considerations, are essential for stabilizing economic welfare in Nigeria.

The study examines the effect of monetary policy tools on deposit money banks performance in Nigeria for the period 2014-2023. The study employed the descriptive statistics, correlation analysis and the Panel Least Square (PLS) methodology to analyze the annual time series data sourced from CBN Statistical Bulletin. The findings specifically found that monetary policy rate has significant negative effect on deposit money banks performance. Cash reserve did not significantly affect deposit money banks performance during the studied period. Money supply has a significant positive effect on deposit money banks performance in Nigeria. The study concludes that monetary policy tools significantly influences deposit money banks performance in Nigeria during the studied period. The study recommends that regulatory authority (CBN) should reduce the current monetary policy rate in order to reverse its negative effect on deposit
money banks performance. Increase in money supply improves the performance of deposit money banks. Thus, increase in money supply should be maintained within acceptable threshold to enable the deposit money banks to sustain its positive effect on their performance.

This study delves into the intricate relationship between currency hoarding, monetary policy, and inflation within the context of Nigeria for the periodof 1990to 2020. It aims to ascertain if there is a relationship between currency hoardingand inflation in Nigeria and also examine how currency hoarding af ects therelationship between monetary policy and inflation in Nigeria. The study wouldbeof utmost significance to student and other researchers who are interestedinunderstanding how currency hoarding af ects the relationship between monetarypolicy and inflation in Nigeria. It focuses on unravelling how changes in currencyin circulation, interest rates and money supply impact inflation dynamics. Themethodology employed is the Error Correction Model (ECM), analysingdataspanning the years 1990 to 2000. Findings reveal crucial insights. CurrencyinCirculation as a percentage of GDP (CPG) is positively related to inflationrate(INF), signifying that an increase in CPG contributes to inflationary pressures. Conversely, interest rates (INTR), exhibits a statistically significant negativerelationship with inflation, with higher interest rates acting as a counterforcetoinflation. However, changes in money supply (MS) shows no significant impact oninflation. The interaction term (CHMP) was found to have minimal impact oninflation. Policy recommendations drawn from these findings emphasizeabalanced management of currency in circulation to avoid excessive inflation, continued use of interest rates as an ef ective tool for controlling inflation, diversification of monetary policy tools, and the adaptation of holistic economicpolicies. Improved data collection and research, exchange rate management, andtransparent communication are also highlighted as critical factors for ef ectivelyaddressing inflation in Nigeria. In summary, this study uncovers the multifacetednature of inflation dynamics in Nigeria and provides valuable guidance for craftingcomprehensive policies to manage inflation in the nation.

This study looks at how monetary policy affected Nigeria's economic growth between 1988 and 2024. The relationships between the monetary policy rate, inflation rate, interest rate, and Treasury bill rate and GDP is the main focus of the analysis. Different levels of significance and directionality among these variables are identified by the study using the ordinary least squares (OLS) econometric method. The findings reveal that the monetary policy rate has a positive and significant effect on economic growth, underscoring its role as a critical tool for economic stabilization. However, interest rate and Treasury bill rate exhibit negative and statistically insignificant relationships with GDP, indicating limited influence within the Nigerian context. Similarly, the inflation rate demonstrates a positive but statistically insignificant relationship with economic growth, suggesting a nuanced effect depending on macroeconomic conditions. The study comes to the conclusion that while monetary policy is still essential for managing the economy, better transmission mechanisms, structural changes, and complementary fiscal measures can increase its efficacy

Background: The study was carried out to examine the cause-effect relationship between monetary policy and foreign trade in Nigeria between 1981 and 2023. Objectives: the study were to determine the impact of exchange rate, money supply (M2) monetary policy rate, credit to private sector on foreign trade. Methods: The study adopted Descriptive statistics, Co-integration, Unit root test and Autoregressive Distributed Lag (ARDL) method of analysis. The data used for this study were sourced from Central Bank of Nigeria (CBN) Statistical Bulletin and World Bank Development Indicators. Pre-estimation tests were
carried out on each of the variables using Augmented Dickey Fuller (ADF) unit root test to avoid spurious regression results. The cointegration test result showed that long-run equilibrium relationship exists between monetary policy and foreign trade in Nigeria. The empirical analysis was conducted using the methodology of Error Correction Model (ECM) approach.

This study examines the impact of monetary policy on international trade in Nigeria using Ordinary Least Squares (OLS) regression analysis. The study employs key monetary policy indicators, including broad money supply, interest rate, inflation rate, exchange rate, and gross domestic product (GDP), to assess their effects on trade openness in Nigeria from 1981 to 2023. The Engle-Granger two-step cointegration test is applied to determine the long-run relationship between monetary policy variables and trade openness. The findings reveal that in the long run, interest rates and GDP have significant positive effects on trade openness, while money supply negatively impacts trade openness. Exchange rate fluctuations

This study evaluates the impact of monetary policy on poverty in Nigeria over a 42-year period (1981– 2023), using time series data and the Autoregressive Distributed Lag (ARDL) model. It investigates the relationship between inflation rate, total Gross Domestic Product (GDP), money supply, interest rate or monetary policy rate, and poverty—measured by the poverty rate. Both short-run and long-run dynamics among these variables are explored. The empirical findings reveal an insignificant long-run relationship between monetary policy and poverty in Nigeria. However, short-run results indicate that persistent inflation worsens poverty by eroding individuals’ purchasing power. Increases in money supply and interest rates are also associated with rising poverty levels in the short term. Diagnostic tests confirm the robustness and reliability of the model, with no evidence of serial correlation or heteroskedasticity. The study concludes that monetary policy can aid poverty reduction and recommends reforms to stabilize inflation, promote inclusive and sustainable growth, and implement long-term structural policies

This study examines the impact of monetary policy on banking sector stability in Nigeria from 2010 to 2024, using Return on Equity (ROE) as a proxy for stability and analyzing the effects of Monetary Policy Rate (MPR), Inflation Rate (INF), Exchange Rate (EXR), and Broad Money Supply (MS). The Autoregressive Distributed Lag (ARDL) bounds testing approach is employed. The short-run results indicate significant negative effects of money supply (coefficient -0.131599, p=0.0117) and inflation (coefficient -0.223254, p=0.0142) on ROE, with MPR showing a mixed impact (positive initially, coefficient 0.222074, p=0.0856; negative lagged, coefficient -0.216642, p=0.0897), and exchange rate being insignificant. Long-run results show no significant effects (p-values 0.61880.9607), supported by the ARDL bounds test (F-statistic 2.23869), though the Johansen test suggests two cointegrating relationships (p=0.0203, 0.027). The Error Correction Model indicates a weak adjustment process (coefficient 0.113123, p=0.5859), reflecting structural inefficiencies. Diagnostic tests confirm model robustness with normal residuals (Jarque-Bera p=0.451992), homoskedasticity (Breusch-Pagan Godfrey p=0.1132), and no significant serial correlation (Breusch-Godfrey p=0.1101). The findings highlight that monetary policy significantly influences banking stability in the short run Through liquidity and inflation but has limited long-run impact due to weak policy transmission. The recommendations by the study include cautious monetary expansion, robust inflation targeting, exchange rate stabilization, and enhanced banking resilience through stricter regulations. Addressing structural rigidities is also crucial for improving monetary policy effectiveness and ensuring sustainable banking sector stability in Nigeria which will ultimately contribute to broader economic growth.