ABSTRACT

The present work aimed at examining the determinants of money supply in Nigeria from 1970-2014. The data collected are secondary data from the Annual Report and Statement of Accounts and CBN Statistical Bulletin. The unit root test and Cointegration test, were carried out, and the model was estimated by OLS. The major findings is that Expected rate of inflation is the major determinant of money supply in Nigeria, while inflationary rates was found to be an insignificant factor determining the level of money supply in Nigeria. Based on the findings of the study, the policy recommendation is that, for Government to control the level of money supply in Nigeria they should target the growth rate of money base and expected rate of inflation, so as to ensure stability in the money supply and also the achievement of monetary policy goals and objectives.