Abstract:
This study examines the impact of monetary policy on trade balance performance in Nigeria for the study period of 1970-2019. Unlike previous studies this study measures monetary policy from two strand with other variables, Interest rate and exchange rate. the relevant variable in these models were sourced from secondary data such as central bank of Nigeria statistical bulletin and the world development index (WDI). In achieving the objectives of this study three research questions and hypotheses were formulated and both descriptive statistic and annual time series econometric methodology was employed, the result revealed that the nominal effective exchange rate (NEER), money supply, gross domestic product (GDP) Degree of openness (DOP) manufacturing capacity utilization (MCU) domestic interest rate (DINT) has a positive but insignificant impact on trade balance performance in the long run over the study period while Real effective exchange rate (REER) and inflation (INF) has a negative and also in significant impact on trade balance performance in Nigeria .the study recommended that recommends that monetary policy authorities should implement monetary policy instrument that will help better trade balance performance.
