Impact Of Monetary Policy On Price Stability In Nigeria:- Nwankwo Rosemond O

Abstract i This study examines the impact ofmonetary policy on price stability in Nigeria using annual data forthe period 1980-2018. Specifically, the study seeks to: examine the effect ofmonetary policy on price stability in Nigeria and to determine the long run relationship between monetary policy and price stability in Nigeria. The study employs the Ordinary Least square (OLS) technique, and the Johansen Cointegration test to address the specific objectives. The study reveals that: there exist a positive and significant relationship between exchange rate and price stability, a positive and insignificant relationship between liquidity ratio and price stability, a positive and significant relationship between open market operation and price stability and a negative and insignificant relationship between money supply and price stability in Nigeria. Also, there exist a long run relationship between monetary policies and price stability in Nigeria. The study therefore recommends, amongst others, that monetary policy in Nigeria should lay emphasis on controlling money supply in order to stabilize the price level and reduce the effect offiscal dominance.