Effect Of Monetary Policy On Balance Of Payment In Nigeria:- Uwasomba Nnaemeka P

ABSTRACT

This research work is on the effect ofmonetary policy on balance ofpayment in Nigeria with the scope beingfrom 1981-2018. The variables included dependent and independent variables. The dependent variable was Balance ofpayment while the independent variables includes money supply, monetary policy rates and liquidity ratio. The ordinary least square (OLS) method was used to carry out the analysis. From the research analysis, money supply was observed to be positive and is statistically significant with balance ofpayment also, monetary policy rates was seen to be statistically significant and showed a positive relationship with balance ofpayment, while liquidity ratio showed a Positive but insignificant relationship with balance ofpayment. The research concludes that there is a positive relationship with monetary policy and balance of payment. The research work suggest that monetary authorities should aim at monitoring regularly the operations ofcommercial banks to ensure effective compliance with laid down guidelines to encourage transparency in banking operations. Balance ofpayment (BOP) position ofany country is one ofthe indicator ofeconomic growth and with this, countries try to ensure that they realize favourable balance ofpayment position. This work presents monetary policy as an intervention strategy by the Central Bank ofNigeria (CBN) aimedprimarily at maintenance ofprice stability and Balance ofpayment equilibrium.