IMPACTS OF MONETARY POLICY INSTRUMENTS ON NIGERIA'S ECONOMY GROWTH (1986-2023)

This study focuses on the effects of selected monetary policy instruments on Nigeria's economy growth. To achieve this objective, three research questions were formulated and hypotheses were tested in line with the objective. This study adopts ex-post facto research design. This study adopts ex-post factor research design. This research design becomes necessary since the study is interested in the result of some past actions or events. The statistical criteria are based on statistical theory. The data for this study are secondary in nature, it is of annual times series from 2002-2022. They include data on exchange rate (EXR), Gross Domestic Product (GDP), Inflation (INF), Money Supply (MS) and Interest Rate (INT) compiled from Central Bank of Nigeria (CBN) Annual Report and Statements of Accounts, Statistical Bulletin. Findings showed that Money supply has a positive impact on the GDP. The interest rate has a negative impact on the GDP. Having seen that exchange rate and money supply have positive impact on the economic growth of Nigeria, there is need to maintain a stable exchange rate. Hence, with stable exchange rate, it will help to curtail inflation, maintain a favourable balance of trade, boost export of domestic commodities and above all, maintain steady growth of the economy. An increase in money supply will also lead to an increase in Gross Domestic Product which will lead to the stable economic growth of Nigeria. It was therefore recommended that the government should try and increase the exchange rate i.e devaluate the value of the Naira so that export will rise and import will fall and thereafter net export will increase leading to an increase in GDP which enhances the economic growth of Nigeria.