Monetary Policy As An Instrument Of Inflation Control

Nigeria in time past, up till the present time has been experiencing a general increase in the price of goods and services. The populace has been suffering from inflation syndrome which has rendered the purchasing power of the Nigerian naira (money) worthless, and has subjugated the people to untold hardship.

Inflation, which is no new phenomenon to the Nigerian economy, has increased drastically in the 1990s. This calls for immediate government attention to map out measures that will be geared towards cushioning the harsh effect of this socio-economic malady. This problem of inflation has been believed to emanate from such factors as; high cost of factors of production, bad attitude of the middlemen under the channel of distribution in their quest to get rich over might, over dependent on imported goods and services etc.

This has contributed in high prices for goods and services, imbalance in government and individual spending and expenditure, artificial scarcity due to hoarding and so on.

In vein of this, the government in conjunction with the monetary authority, embarked on monetary policy measures which had one of its main objective as to reducing the inflation rate to its bearest minimum.

To this end, the researcher made use of secondary sources of data which involved the use of textbooks, magazines journals and other sources, which are of secondary nature.

However, it is hoped that at the end of this research, the effect of inflation will be exposed; also the effectiveness of monetary policies at reducing the effect of inflation and its achievements will be highlighted.

It is believed that if the recommendations made in this researches are properly applied with the already existing policies, the problem of inflation will be reduced if not properly eradicated and this returning the economic position of Nigeria to its former position as in the 1970s. 

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