Inflation as measured by the consumer price index reflects the annual percentage change in the cost to the average consumer of acquiring a basket of goods and services that may be fixed or changed at. Inflation, money supply, exchange rate, monetary policy rate. Monetary policy refers to the combination of measures designed to control the supply of money. The effect of inflation and interest rate on economic growth of nigeria abstractthe gross domestic product growth is a long term rise in the capacity to supply increasingly diverse economic goods o its population. In economics, inflation is a sustained increase in the general price level of goods and services. Monetary policy, inflation and economic growth in nigeria. In the model specified, inflation is the regress and while cash reserved requirement, liquidity ratio, money supply, minimum rediscount rate and interest rate are the regressor. 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. This has led to reduction in the standard of living of nigerians. Pdf the impact of fiscal policy on inflation in nigeria.
Though nigeria inflation rate fluctuated substantially in recent years, it tended to increase through 1999 2018 period ending at 12. The causes of persistent inflation in nigeria victor o. Effectiveness of monetary policy on inflation targeting in. Nigerias inflation has been higher than the average for african and subsaharan countries for years now, and even exceeded 16 percent in 2017 and a real, significant decrease is nowhere in. Given the number of years the central bank had been in existence and of numerous monetary policy measures, one will expect that domestic price could have been relatively stable. Economic outlook 3 contents theme 1 oil prices still lower for longer theme 2 economy growth gets a boost from high oil prices theme 3 inflation declines sharply, driven mainly by base effects theme 4 monetary policy rate set to fall, and then rise theme. Free subscription get the hottest stories from the largest news site in nigeria. At its 2021 march monetary policy meeting, nine of the 10 members of the monetary policy committee mpc of the central bank of nigeria cbn decided to leave the monetary policy rate and all other monetary policy mechanisms unchanged, meeting market expectations. Designing an effective monetary policy for nigeria. In conclusion, studies on dollarization in nigeria remain scanty. The main purpose of this study is to empirically examine the effectiveness of monetary policy in controlling inflation in nigeria. Dollarization, inflation and interest rate in nigeria. Inflation is the increase in the prices of goods and services which is caused by a variety of factors.
Fiscalmonetary policy and economic growth in nigeria. An alternative approach to measuring current monetary inflation pdf. The national bureau of statistics nbs, says the consumer price index cpi, which measured inflation increased to 11. The central bank of nigeria is the apex monetary authority that formulates and implements monetary policy in nigeria aim at achieving stable price. Monetary policy and inflation control in nigeria gbadebo, adedeji daniel mohammed, nuhu. Based on the findings, the study concluded that inflation is a significant and viable monetary policy instrument that affects economic growth in nigeria and could be used by monetary authority in. They were downloaded from the fred database at the federal reserve. Pdf monetary policy, inflation and economic growth in. Monetary policy effectiveness, output growth and inflation in nigeria.
Inflation targeting regime in nigeria the story thus far. Although several people, producers, consumers, professionals, nonprofessionals, trade unionists, workers and the likes, talk frequently about inflation particularly if the situation has assumed unemployment and inflation in nigeria 20 2. Monetary policy involves the management of money, the supply of money and interest rate. When there is a potent monetary policy instrument, it is expected that contractionary monetary policy shocks should be able to reduce inflationary pressure bongabonga, 2017. In 2008, the inflation rate reverted to double digit 11. School of accounting, economics and finance, university of kwazulunatal, south africa and. Inflation, exchange rate and efficacy of monetary policy. At its 2223 july meeting, the monetary policy committee mpc of the central bank of nigeria cbn unanimously decided to leave the monetary policy rate as well as all other monetary policy parameters unchanged, in line with market expectations. Central bank of nigeria shortterm monetary policy framework in nigeria before 2002, the central bank of nigeria had designed monetary policy in line with fiscal duration of one year monetary policy had always faced the problem of non committal to both intermediate and ultimate targets the optimal longterm policy was not consistent. Some researchers argued that, monetary policy is an effective policy measure to achieve inflation targeting, these researchers include gbadebo and muhammed 2015, herberger 1978, mccallum and nelson 2010, graude and polan 2005. Waec gce past questions and answers free download pdf. This page provides nigeria inflation rate actual values, historical data, forecast. The effectiveness of monetary policy in controlling inflation in nigeria with abstract, chapter 15, references and questionnaire.
The impact of inflation on unemployment in nigeria 200120. The coefficient of inflation rate appear with the right negative sign and. The effectiveness of monetary policy in the control of inflation in. These are the major external factor contributing to nigerias inflation. The efficacy of monetary policy as an instrument for. Citescore values are based on citation counts in a given year e. In 2002 in order to free monetary policy implementation from the problem of timeinconsistency and. In nigeria, the monetary policy is the macroeconomic policy laid down by the central bank of nigeria. Impact of monetary policy on inflation control in nigeria munich.
Nigeria, sierra leone and the gambia until 1957 when ghana opted out. The article examines the nature of fiscal policies in nigeria using vector autoregression var model. The effect of inflation and interest rate on economic. Impact of monetary policy on inflation control in nigeria.
This paper posits that monetary policy formulation may concentrate more on the use of treasury bill as an instrument of inflationtargeting in nigeria. This study was carried out to evaluate inflation accounting and control through monetary policy measures in nigeria from 1973 to 2010. Though nigeria inflation rate fluctuated substantially in recent years, it tended to decrease through 1969 2018 period ending at 12. Monetary policy and its effectiveness on economic development in nigeria author akinjare victoria, a. Monetary policy instruments, target and goals 6 list of figures figure 1.
The impact of fiscal policy on inflation in nigeria. Monetary policy series is available to the general public free of charge. Annual time series data, sourced from central bank of nigeria cbn statistical bulletins 19852012 were used to analyze and estimate the three multiple regression models drawn up, with the aid of software package for social sciences spss. Enahoro department of accounting, babcock university, ilishan, nigeria. Moreover, the response of inflationary expectations to monetary policy can. Director, monetary policy department, central bank of. It is only through an effective economic system that human and material resources of the nation could. It is the demand side economic policy implemented by the government to achieve macroeconomic objectives like growth, consumption, liquidity and inflation. The average value for nigeria during that period was 12. Operational performance of fiscal and monetary policies in nigerian financial institutions john a. Data was collected from cbn statistical bulletin for the period 1970 2009. Inflation as measured by the consumer price index reflects the annual percentage change in the cost to the average consumer of acquiring a basket of goods and services that may be fixed or changed at specified intervals, such as yearly. When they opt for the expansionary policy, the amount of money in circulation increases.
Inflation is a major problem facing nigeria as a country today. Monetary policy and inflation in nigeria economy cbn, free undergraduate project topics, research materials, education project topics, economics project topics, computer science project topics, hire a data analyst. Inflation, exchange rate and efficacy of monetary policy in nigeria. The implication of the analysis is that discretionary monetary policy inflation. The study set three major objectives which include determine the relationship between economic growth, inflation and unemployment. Babajide, isibor areghan akhanolu and okafor tochukwu. Inflation in emerging and developing economies open knowledge. Fiscal policy, public debt and monetary policy in emerging. The role of central banks in macroeconomic and financial stability bis. Recent journal of monetary economics articles elsevier. Pdf this study examined the effectiveness of monetary policy and control of inflation in nigeria. Nigeria inflation, annual percent change in the cpi.
The dynamics of monetary policy and inflation in nigeria doi. The effect of inflation and interest rate on economic growth of nigeria with abstract, chapter 15, references and questionnaire. Secondary data were used empirically to do the assessment. There has been fluctuations in nigerias inflation rate for decades rising as high as 47. Inflation, annual percent change in the cpi in nigeria, february, 2020. The study examined the efficancy of monetary policy in controlling inflation in nigeria. Monetary policy and its inflationary pressure in pakistan. But the policy measures failed as the prices of goods and the profits of. An empirical analysis fatukasi bayo department of economics adekunle ajasin university, akungbaakoko abstract this study investigates the determinants of inflation in nigeria between 1981 and 2003. The nigeria economy has experienced robust gdp growth rates over the reform. Nigerias inflation rate increases in november vanguard news. Thus this paper focuses on the use of monetary policy to check inflation in nigeria. It must be noted that the private sector creates the most jobs in a free market economic system. Ogbonna inflation, exchange rate and efficacy of monetary policy in nigeria.
We have scoured all the available researcesh so that you wont have to. For that indicator, central bank of nigeria provides data for nigeria from january 1996 to february 2020. Download this complete banking and finance project material titled. Our model passes the entire tests and is free from. The trend between inflation and economic growth in nigeria the facts and figures obtained from the imf world economic outlook report 2011 revealed that the nigerias gdp tends to be low when the inflation rates are high apart from a few years of the 80s. Learn more about the nigeria economy, including the population of nigeria, gdp, facts, trade, business, inflation and other data and analysis on its economy from the index of economic freedom. Effect of monetary policy in nigeria 5936 words bartleby. Pdf this study examines the effectiveness of monetary policy in controlling inflation in the nigerian economy using a datarich. Inflation is a household word in many market oriented economies. This growing capacity is said to base on advancing technology. The dynamics of monetary policy and inflation in nigeria.
378 997 1471 341 1537 286 1585 556 917 403 1060 1264 191 835 448 434 1154 1246 593 1208 1275 928 1479 1178 128 1076 168 125 894 1578 1453 299 799 483 82 544 1148 917 377 196 724 642 110 1483 316