Authors : Akinjare Victoria, A.A. Babajide, Isibor Areghan Akhanolu and Okafor tochukwu
Abstract: Monetary policy play special roles in any developing country and one of the special roles is to control the supply of money with the purpose of promoting economic growth and price stability. Monetary policy in a simplified analysis amount to the determination of the optimal quantity of money or in a "dynamic" sense, the optimal rate of growth of money stock in an economy. But there is more to monetary policy than the determination of the optimal stock or growth rate of money. The main thrust of this study was to examine the impact of monetary policy on macroeconomic outcomes in Nigeria, so as to draw useful lessons from her inception. In demonstrating the application of ordinary least square method, the multiple linear regression analysis will be used with gross domestic product, inflation rate while exchange rate, interest rate and money supply as the explanatory variables. The data for the study was therefore obtained from the Central Bank of Nigeria publications. The result gotten shows that while exchange rate, interest rate and money supply is significant in impacting the economy, inflation proves otherwise. Hence the study recommends amongst others that Monetary policies should be used to create a favourable investment climate by facilitating the emergency of market based interest rate and exchange rate regimes that attract both domestic and foreign investments, create jobs, promote non oil export and revive industries that are currently operation far below installed capacity.
Akinjare Victoria, A.A. Babajide, Isibor Areghan Akhanolu and Okafor tochukwu, 2016. Monetary Policy and its Effectiveness on Economic Development in Nigeria. International Business Management, 10: 5336-5340.