The Impact of Monetary Policy in Nigeria

Gbenga Samuel Lawal

Bachelor's thesis

Abstract:

This study assessed the effect of monetary policy instruments on economic growth in Nigeria using the data obtained from the Central Bank of Nigeria bulletin (1997 to 2016).GDP growth rate was used as the dependent variable while Interest rate, exchange rate, inflation rate and the ratio of broad money supply to the gross domestic product were employed as the independent variables. The Ordinary Least Square (OLS) regression results revealed that IFR has a significant positive effect on economic growth represented by GDPGR, while INR, EXR and BMS/GDP have a negative but not significant effect on economic growth.Based on the findings, the study concluded that inflation is a significant and feasible monetary policy instrument that affects the growth of Nigeria economy and could be used by monetary authority and Banks to achieve higher economic growth. However, attention should not be on very low inflation, as this could lead to negative growth. A moderate and balanced level in inflation should be encouraged, other variables should also be low to enhance economic growth. Therefore, this study recommended that monetary authority in Nigeria should pay more attention to the inflation rate in the economy as it has a significant effect on economic growth in Nigeria.

Keywords

Banking, Policies, Economic growth, Exchange rate

Language used: English

Date on which the thesis was submitted / produced: 22. 3. 2020

Thesis defence

• Supervisor: doc. Ing. Irena Jindřichovská, CSc.

Czech University of Life Sciences Prague

Faculty of Economics and Management

Bachelor programme / field:
Economics and Management / Economics and Management