You have no items in your shopping cart.
ABSTRACT
It has been observed overtime that Nigeria’s current account balance has been characterized with more of deficit than balance or surplus. This study therefore analyses the impact of monetary policy on current account balance (CAB) in Nigeria from 1981 to 2019. The dependent variable in the model is the current account balance while the explanatory variables are interest rate, money supply, exchange rate, gross domestic product with the money supply as the main proxy for monetary policy while the other independent variables are the control variables. The vector error correction model (VECM) was used to analyze the model. The empirical result shows that monetary policy impacts positively on Nigeria’s current account balance. Also, money supply, interest rate, and real gross domestic product were identified to positively affect changes in current account balance while exchange rate was found to negatively affect changes in the Nigerian current account balance. To this end, the study recommends the need for fiscal discipline, active government participation in developmental goals and relevant trade policy implementation with a view to enhancing the overall current account balance and the overall growth of the economy.
