Effectiveness of Monetary Policy in Achieving Price Stability in Nigeria (l980-2018):- George Vivian A

ABSTRACT

 The study examined the Effectiveness ofmonetary policy in achieving price stability in Nigeria The secondary data was used from (1981 -2018) were collected from various issues of the Central Bank ofNigeria (CBN) statistical bulletin and annual reports. Gross domesticproduct as the first dependent variable and consumer price index as the second dependent variable which was measured with inflation rate, interest rate and money supply. Analysis was performed on data collected using Ordinary Least Squares Method and other post estimations (Correlation Matrix; Breusch-Godfrey LM and White Heteroscedasticity Test) to determine the existence of relationship between the variables. The results ofthe study show that, there is insignificant and positive short-run relationship ofgross domestic product on consumer price index, and inflation rate on gross domestic product while inflation rate, interest rate and money supply as positive and statically significant on consumer price index. The study concluded that, all the short run deficiency in the economy arena or system will be corrected in long run ifonly government yield to the recommendations, by CBN to consider the implication oftheir decisions when lending to commercial banks. The apex bank should allocate credit to banks and at rate reasonable for them to borrow so as to guarantee that banks do not charge high lending rate when allocating financial resources to the public