The relationship between Nigeria's monetary policy and food
inflation has been experimentally examined in this study. A quantitative
research method based on ex-post facto research design was adopted using the
non-linear autoregressive distributed lag model approach (NARDL) in order to
examine the impact of monetary policy on food inflation in Nigeria between the
periods of 1980 and 2021. As a dependent variable, Food Inflation (FINF) was
employed in the study. Exogenous variables also included Treasury Bills Rate
(TBR), Exchange Rate (EXG), Monetary Policy Rate (MPR), and Broad Money Supply
(M2). The study used time series data from the World Bank data repository
(WDI), the National Bureau of Statistics, and the Central Bank of Nigeria's
(CBN) Statistical Bulletin. Data analysis showed that the exchange rate significantly
and negatively affects the price of food in Nigeria. Similar to this, empirical
data demonstrates a long-run association between Nigeria's monetary policy
rates and food inflation. Both the money supply and the monetary policy rate
have a favorable impact on food inflation in Nigeria, which is both positive
and significant. As a result, it was advised that Nigeria's monetary policy be
set up so that the goals to be attained are clearly specified.
JEL classification numbers: E31, E52, E51, C5.
Keywords: Inflation, Monetary Policy, Money Supply, NARDL.