EFFECT OF MONEY SUPPLY TO OIL PRICE SHOCKS IN NIGERIA: AN AUTO REGRESSIVE DISTRIBUTED LAG (ARDL) APPROACH
Dr Titus Wuyah Yunana and Dr Abu Maji
Volume 1 Issue 1
Abstract
The study examined the effect of monetary policy to oil price shocks in Nigeria spanning the period 1986-2020. Secondary data were used for the estimation and were sourced from Central Bank of Nigerian (CBN) Annual Statistical Bulletin of various years. The study employed ARDL model for estimation. The results of the short-run ARDL revealed that all the variables (real interest rate, real exchange rate, broad money supply and inflation rate) are statistically significant in influencing oil price shocks. The long-run estimation shows that inflation rate was not significant but other variables were statistically significant. The study, therefore, recommends that efficient manipulation of monetary policy rate which control other interest rate for investors to operate, lower exchange to encourage both local and foreign investors and control of inflation to control oil price shocks. Keywords: Monetary Policy, Oil Price, Shocks, Interest Rate, Exchange Rate
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