Estimating Monetary Policy Reaction Function: The Case of Nigeria
Estimating Monetary Policy Reaction Function: The Case of Nigeria

Summary/Abstract: The main responsibility of the Central Bank of Nigeria (CBN) is to formulate and implement monetary policy, with the primary objective of maintaining stable prices conducive to balanced and sustainable economic growth in Nigeria. It also aims to promote and preserve monetary and exchange rate stability as well as ensure a stable and sound financial system. Nigeria’s monetary policy is anchored on a monetary targeting framework, and price stability represents the overriding objective of monetary policy. The transmission mechanism needs to be continually strengthened. Consequently, there is need to fine-tune the monetary policy framework so that transmission can be more effective and clear and the economic agents can view monetary authority actions as credible.

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