EFFECT OF CENTRAL BANK OF NIGERIA MONETARY POLICY ON ECONOMIC DEVELOPMENT OF NIGERIA

The critics’ key arguments revolve around low monetary policy transparency with regard to the real economy and the time lag between when the monetary policy changes were brought about and the time it takes to have a positive effect in the real economy. The primary objective of this study is to assess the effect of Central Bank of Nigeria monetary policy on the Nigerian economy. Correlational research design is adopted to capture the dependent and independent variables. The population of the study consists of all the quoted companies during the period under study from (1986 to 2015). The sample covers all the population using census sampling technique. A secondary source of data collection was used. In order to analyze the data with a view of resolving the problem and achieving the stated objectives of the study, the study used time series ordinary least square multiple regression technique. Findings of the study reveals that, exchange rate, money supply and interest rate are positively influencing economic development of Nigeria while, monetary policy rate was found to be insignificantly related to economic development of Nigeria. It is recommended that, Central Bank of Nigeria as the apex Bank should consider reducing the maximum exchange rate of the U.S dollar as against the Nigerian currency from 198.39 as found in this study within the periods of this study to ₦160.00 per $1 dollar. The Central Bank of Nigeria should encourage and increase money supply. Finally, the regulators especially Central Bank of Nigeria (CBN) should direct all the Deposit Money Banks in Nigeria to reduce their interest lending rate by given directives of the maximum interest rate to be charged on borrowed fund.