International Journal of Social Science & Economic Research
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Title:
PRICE BASED NOMINAL ANCHOR AND THE EFFECTIVENESS OF INFLATION CONTROL IN NIGERIA

Authors:
Uduakobong S. Inam, Ph.D and Williams A. Oscar

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1Uduakobong S. Inam, Ph.D and 2Williams A. Oscar
1. Department of Economics, Faculty of Social Sciences ,University of Uyo, P.M.B. 1017, Uyo, Akwa Ibom State, Nigeria
2. Central Bank of Nigeria, Abuja, Nigeria

MLA 8
Inam, Uduakobong S., and Williams A. Oscar. "PRICE BASED NOMINAL ANCHOR AND THE EFFECTIVENESS OF INFLATION CONTROL IN NIGERIA." Int. j. of Social Science and Economic Research, vol. 5, no. 8, Aug. 2020, pp. 2066-2086, ijsser.org/more2020.php?id=146. Accessed Aug. 2020.
APA 6
Inam, U., & Oscar, W. (2020, August). PRICE BASED NOMINAL ANCHOR AND THE EFFECTIVENESS OF INFLATION CONTROL IN NIGERIA. Int. j. of Social Science and Economic Research, 5(8), 2066-2086. Retrieved from ijsser.org/more2020.php?id=146
Chicago
Inam, Uduakobong S., and Williams A. Oscar. "PRICE BASED NOMINAL ANCHOR AND THE EFFECTIVENESS OF INFLATION CONTROL IN NIGERIA." Int. j. of Social Science and Economic Research 5, no. 8 (August 2020), 2066-2086. Accessed August, 2020. ijsser.org/more2020.php?id=146.

References

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Abstract:
This paper examines the effectiveness of price based monetary policy instruments on inflation in Nigeria. Specifically, it: examines the response of inflation to the innovations from price based monetary policy anchors; and measures the extent of decomposition of price variables to inflation rate in Nigeria. The study uses monthly series of commonly used monetary policy price variables: Monetary Policy Rate (MPR), Exchange Rate, Interest rate (lending rate), Treasury bill rate and Cash Reserve Ratio (CRR). The findings of the paper showed that among the price variables used by the policymakers, the exchange rate is the most effective and the least effective is the Monetary Policy Rate. In order of their effectiveness on inflation, the cash reserve ratio stands second to the exchange rate, followed by the Treasury bill rate, and interest rate (lending rate). The effectiveness of the exchange rate reflects the import-dependent nature of Nigerians on foreign-produced consumer and capital goods whose prices transmit into domestic prices in the economy.

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