ABSTRACT

 This study examined the impact of monetary policy in controlling inflation in Nigeria. The objective of the study was to examine the-extelll to which monetary policy controls inflation in Nigeria and determine if there is a sustainable long run relationship between money supply and inflation in Nigeria.In analysing the above objective, the study used secondary data comprising of monetary policy rate, money supply, interest rate, exchange rate and inflation (dependent variable) obtained from Central Bank statistical bulletin for the period of 37 years, from 1981 to 2018. The data obtained was estimated and statistically analysed using E-views 9. The study findings established that the estimated coefficient of the regression parameters have both positive and negative effect on inflation being the regressed. The study also found out that there is no long run association between money supply and inflation rate in Nigeria during the period under review. The study concluded thatexchange rate was negatively related to inflation during the period under review and monetary policy was positively related to inflation but insignificant in controlling inflation. The study therefore recommends that government through the Central Bank of Nigeria should checkmate the activities of the Commercial Banks regarding outrageous use of interest rate against potential investors in the economy also. the Central Bank of Nigeria should develop a policy framework that would regulate the exchange rate in the economy, in order to curtail inflationary trend in the economy.