Monetary Policy As A Tool For Government Intervention In The Stabilization Of Price:- Ohanukere Ifeanyi

ABSTRACT ix This study sought to examine the “Monetary Police as a toolfOR Government Intervention in the stabilization ofprice in Nigerian EconomyTo answer the research question, the study used secondary data obtained from Central Bank statistical bulletin for the period of 38 years, from 1981 to 2018. The study therefore examined the influence of money supply Monetary Policy Variable on the Consumer Price Index (CPI), the effect of interest rate Monetary Policy Target Variable on domestic private investment and impact ofmoney supply on Gross Product Proxy for economic growth. The research design adopted in the study is the Correlation Research Design. Economic application was usedforthe analysis ofrelevant relationships and the Ordinary Least Square (OLS) Regression Technique was employedfor estimation purposes. The estimation of relevant functions was appraised on A-Priori theoretical expectation, Statistical and Econometric grounds. The study suggests that Monetary Policy has significant influence on the direction of aggregate prices in the economy. Again, Monetary Policy has significant nominal impact on economic growth in Nigeria. However, the study shows Monetary Policy has not influenced investment through interest rate. Incidentally, the bane ofMonetary Policy performance through its interest rate channel is due to the huge presence of the government in the money market for fund borrowing. The study therefore recommends the federal government through the Central Bank of Nigeria evolve appropriate policy to discourage the government (state and otherwise) participation in the money markets as borrower among others.