Economic and Financial Review


Central Bank of Nigeria, Research Department.


Exchange rate policy, Monetary policy, Fixed exchange rate, Exchange rate, Interest rate, Monetary targeting framework, Exchange rate stability


This paper examines the interplay between monetary policy and exchange rate regime in an import dependent economy. It is organised as follows; section II discusses the theoretical issues in monetary policy and exchange rates. In section III a review and appraisal of monetary and exchange rate policies in Nigeria from inception is presented. An empirical analysis, using the VAR modeling technique, evaluates the main determinants of exchange rate stability in Nigeria in section IV, while section V discusses the limits of monetary policy. Section VI concludes the paper.

Author Bio

Dr. O. J. Nnanna was Director of Research, Central Bank of Nigeria at the time this article was published.





Recommended Citation

OduNnanna, O. J. (2002). Monetary policy and exchange rate stability in Nigeria, Economic and Financial Review (EFR), 40(3), 1-21.



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