Open Access Journal Article

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

by Bello Dalhatu a,* ,  Ebuh Godday Uwawunkonye a  and  Umemezia Bernice Adaeze a
a
Monetary Policy Department, Central Bank of Nigeria, Abuja, Nigeria
*
Author to whom correspondence should be addressed.
FEL  2024 3(3):35; https://doi.org/10.58567/fel03030005
Received: 23 February 2024 / Accepted: 24 August 2024 / Published Online: 19 December 2024
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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;
Copyright: © 2024 by Dalhatu, Godday Uwawunkonye and Bernice Adaeze. This is an open-access article distributed under the terms of the Creative Commons Attribution License (CC BY) (Creative Commons Attribution 4.0 International License). The use, distribution or reproduction in other forums is permitted, provided the original author(s) or licensor are credited and that the original publication in this journal is cited, in accordance with accepted academic practice. No use, distribution or reproduction is permitted which does not comply with these terms.

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ACS Style
Dalhatu, B.; Godday Uwawunkonye, E.; Bernice Adaeze, U. Investigating the Role of Policy Rate and Money Supply in Nigeria's Inflation Stability. Financial Economics Letters, 2024, 3, 35. https://doi.org/10.58567/fel03030005
AMA Style
Dalhatu B, Godday Uwawunkonye E, Bernice Adaeze U. Investigating the Role of Policy Rate and Money Supply in Nigeria's Inflation Stability. Financial Economics Letters; 2024, 3(3):35. https://doi.org/10.58567/fel03030005
Chicago/Turabian Style
Dalhatu, Bello; Godday Uwawunkonye, Ebuh; Bernice Adaeze, Umemezia 2024. "Investigating the Role of Policy Rate and Money Supply in Nigeria's Inflation Stability" Financial Economics Letters 3, no.3:35. https://doi.org/10.58567/fel03030005
APA style
Dalhatu, B., Godday Uwawunkonye, E., & Bernice Adaeze, U. (2024). Investigating the Role of Policy Rate and Money Supply in Nigeria's Inflation Stability. Financial Economics Letters, 3(3), 35. https://doi.org/10.58567/fel03030005

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