ABSTRACT

The study was specifically embarked upon to establish the influence of macroeconomic factors on money supply in Nigeria using annual time series data from 1990 to 2016. Macroeconomic factors used for the study were interest rate, inflation, exchange rate and GDP growth rate while broad money supply was used as the dependent variable. The data was analyzed using the multiple regression analysis based on ordinary least squares technique. Form the results, it was found that interest rate and exchange rate were the significant variables that influenced broad money supply in Nigeria, while inflation and GDP growth rate were insignificant. Based on the findings, it was recommended among other things that monetary authorities should be committed to the mission of interest rate stability as well as improving the regulatory and supervisory frameworks to secure a strong financial sector for efficient intermediation to enhance money supply. 

CHAPTER ONE: INTRODUCTION

1.1 Background to the Study . . . . . . . 1

1.2 Statement of the Problem . . . . . . . 4

1.3 Objectives of the Study . . . . . . . 5

1.4 Research Questions . . . . . . . 5

1.5 Research Hypotheses . . . . . . . 5

1.6 Scope of the Study . . . . . . . 6

1.7 Significance of the Study . . . . . . . 6

CHAPTER TWO: LITERATURE REVIEW

2.1 Conceptual Framework . . . . . . . 7

2.1.1 Overview of macroeconomic variables in Nigeria . . . 7

2.1.2 Money supply        . . . . . . 8

2.1.3 Link between macroeconomic indicators and money supply . . 9

2.2 Theoretical Framework . . . . . . . 22

2.2.1 Quantity theory of money . . . . . . . 22

2.2.2 Liquidity preference theory of money . . 22

2.2.3 Portfolio theory of money . . . . . 23

2.2.4 Inventories theory of money . . . . . 23

2.3 Empirical Review . . . . . . . 23

2.4 Summary of Literature . . . . . . . 33

CHAPTER THREE: RESEARCH METHODOLOGY

3.1 Research Design . . . . . . . 34

3.2 Nature and Sources of Data . . . . . . . 34

3.3 Estimation procedure . . . . . . 34

3.4 Model Specification . . . . . . . 34

3.5 Description of research variables . . . . . . 35

3.6 Technics of Data Analysis . . . . . . 36

3.6.1 Regression Analysis . . . . . . 36

3.6.2 Basis of evaluation . . . . . . 36

CHAPTER FOUR:  PRESENTATION OF DATA, ANALYSIS AND DISCUSSION

4.1 Presentation of Data . . . . . . 37

4.2 Trend analysis of data . . . . . . 37

4.2.1 Broad money supply (M2) . . . . . . 37

4.2.2 Interest rate (INT) . . . . . . 37

4.2.3 Trend of inflation rate (INF) . . . . . . 37

4.2.4 Trend of exchange rate (EXR) . . . . . 40

4.2.5 Trend of GDP growth rate (GRT) . . . . . 41

4.3 Analysis of Macroeconomic indicators and money supply . . . 42

4.3.1 Test of Hypotheses . . . . . 44

4.3.2 Decision of findings . . . . . 45

CHAPTER FIVE: SUMMARY OF FINDINGS, ANALYSIS AND DISCUSSION OF RESULTS

5.1 Summary of Findings . . . . . 49

5.2 Conclusion . . . . . 50

5.3 Recommendations . . . . . 50

REFERENCES