EFFECT OF MONETARY POLICY ON THE GROSS DOMESTIC PRODUCT OF NIGERIAN MANUFACTURING SECTOR

Abstract

This research looked at the impact of monetary policy on manufacturing industry production in the Nigerian economy. According to the findings of the study, the monetary policy rate and cash reserve ratio have a considerable influence on the manufacturing sector production in Nigeria. The impact of monetary policy on Nigeria's manufacturing sector production was examined using exploratory and analytical methodologies. The data utilized are annual observations of monetary policy and industrial sector production. The National Bureau of Statistics and other statistics bulletin issues published by the Central Bank of Nigeria served as the data's primary sources. The time series model was then estimated using the ordinary least squares (OLS) method in order to determine the individual and combined impacts of monetary policy on the expansion of the manufacturing sector from 2009 to 2019. According to the findings, there is a relationship between monetary policy and the manufacturing sector that fosters a wide range of outcomes, including increased productivity, increased GDP, price stability, preservation of the balance of payments' equilibrium, creation of jobs, output growth, and sustainable development, as well as a decrease in national inflation.