ABSTRACT

This study examined the effectiveness of monetary policy in curbing inflation in Nigeria for the period of 34 years (1981-2015) with a time series data. The study econometric model was estimated using Ordinary Least Square (OLS). In the model, inflation was regressed against Exchange Rate, Money Supply, Real Gross Domestic Product and one period lag of inflation. The study found out that there exist a negative significant relationship between Real Gross Domestic Product and inflation rate in Nigeria under the period of study. Furthermore, there exist a positive significant relationship Between Money Supply and inflation rate in Nigeria under the period of study. Exchange rate exerted a positive significant relationship with inflation rate in Nigeria under the period of study. The study recommended that if policy makers want to achieve sustainable economic growth in Nigeria they should focus on the growth of money supply since from our study it was found to have significantly contributed to economic growth.