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ABSTRACT
The research on the impact of monetary policy on foreign trade was conducted by taking secondary data from the Central Bank of Nigeria, Statistical Bulletin. The data were collected for the period of thirty years i.e., 1987- 2021. The main purpose was to evaluate the use of monetary policy on economy. The specific objectives were to find out the impact of monetary policy on foreign trade. To achieve the desired objectives, the study employed quantitative analysis approach. The variables considered appropriate indices for monetary policy (Money Supply, Interest Rate, Exchange Rate, Inflationary Ratio and Liquidly Ratio) and how they affect the dependent variable (Foreign trade). The major tool of analysis is a multiple regression analysis model specified on the basis of perceived function relationship between monetary policies and foreign exchange earnings in Nigeria. Augmented Dickey-Fuller (ADF) test was used to test for the stationarity of the variables. The Johansen co-integration test was used to check if the variables are co-integrated in the long run. ECM was used to correct any form of disequilibrium in the short run.
