Effect of monetary policy on food inflation in Nigeria: Evidence form Quantile Regression Model

Nadani, Abdulrahman Abdullahi; Mohammed, Dansabo Usman; Yaro, Ibrahim; Aondoawase, Asooso

مجلة بحوث متقدمة في الاقتصاد واستراتيجيات الاعمال
Volume 4, Numéro 2, Pages 05-14
2023-12-31

Effect Of Monetary Policy On Food Inflation In Nigeria: Evidence Form Quantile Regression Model

Authors : Nadani Abdulrahman Abdullahi . Mohammed Dansabo Usman . Yaro Ibrahim . Aondoawase Asooso .

Abstract

This study examines the effect of monetary policy on food inflation in Nigeria using a quantile regression model and monthly data from January 2004 to October 2021. The results of the study reveal that food inflation falls by 0.41 and 0.69 percent at the 25th and 50th quantiles, respectively, following a restrictive monetary policy by the apex bank in Nigeria. As the exchange rate depreciates, food inflation rises by 8.92 percent at the 25th quantile, 12.6 percent at the median, and later falls to 16 percent at the 90th quantile. The real GDP is significant across all quantiles. Lastly, the oil price is positive and significant at the OLS estimate and the 90th quantile. The study recommends unconventional monetary policies for improving supply chain of agricultural products.