Economic and Financial Review


Central Bank of Nigeria


Monetary Policy, Credit Growth, Asset Prices, Vector Auto Regression, Monetary Policy Transmission, Nigeria


This paper contributes to the debate on the monetary policy transmission mechanism in Nigeria. The paper explores the impact of monetary policy on credit growth, and whether these credit developments are capable of influencing asset prices (stock prices) in the Nigerian economy. Using the VAR model spanning annual data from 1986 to 2012, the impulse response functions revealed that the relationship between asset prices, captured by the All-Share Index, and monetary policy, is not direct, but operates mainly through the response of inflation to key monetary aggregate. A positive shock to money supply growth would raise credit and inflation which would then induce growth in asset prices growth in asset prices.

Author Bio

The authors are staff of Research Department, Central Bank of Nigeria.

Publication Title

CBN Economic and Financial Review





Recommended Citation

Ukpai, K., Yilkudi, D. & Ukeje, H. (2012). Asset Prices, Credit Growth and Monetary Policy in Nigeria. CBN Economic and Financial Review. 50(3, Part A), 21-44.

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Finance Commons



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