Investigating the Role of Policy Rate and Money Supply in Nigeria's Inflation Stability

Bello Dalhatu, Ebuh Godday Uwawunkonye and Umemezia Bernice Adaeze
Additional contact information
Bello Dalhatu: Monetary Policy Department, Central Bank of Nigeria, Abuja, Nigeria
Ebuh Godday Uwawunkonye: Monetary Policy Department, Central Bank of Nigeria, Abuja, Nigeria
Umemezia Bernice Adaeze: Monetary Policy Department, Central Bank of Nigeria, Abuja, Nigeria

Financial Economics Letters, 2024, vol. 3, issue 3, 52-61

Abstract: This study examines the factors influencing inflation stability in Nigeria from 2011Q1 to 2023Q1. We employ an ARDL model to assess the impact of monetary policy rate, money supply, crude oil price, GDP growth, and government budget deficit on inflation. Our findings reveal that broad money and fiscal deficit exert a positive and statistically significant influence on inflation in both the short and long run. Interestingly, monetary policy rate only affects inflation in the short term. These results suggest that Nigerian policymakers should prioritize managing broad money and fiscal deficits to achieve long-term inflation stability.

Keywords: Inflation; Broad Money; Monetary Policy Rate; ARDL; Nigeria (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.anserpress.org/journal/fel/3/3/35/pdf (application/pdf)
https://www.anserpress.org/journal/fel/3/3/35 (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bba:j00007:v:3:y:2024:i:3:p:52-61:d:367

Access Statistics for this article

Financial Economics Letters is currently edited by Ramona Wang

More articles in Financial Economics Letters from Anser Press
Bibliographic data for series maintained by Ramona Wang ().