Page 4494 INTERNATIONAL JOURNAL OF RESEARCH AND INNOVATION IN SOCIAL SCIENCE (IJRISS) ISSN No. 2454-6186 | DOI: 10.47772/IJRISS |Volume VIII Issue VIII August 2024 www.rsisinternational.org Monetary Policy Rate and Food Inflation in Nigeria Nwachukwu Edwin Udochukwu, Orji Alexander Chinedu, Edeh B. Ogah, Ukeje Chiemezie Desmond Nnamdi Azikiwe University, Awka, Nigeria DOI: https://dx.doi.org/10.47772/IJRISS.2024.8080345 Received: 31 July 2024; Accepted: 16 August 2024; Published: 24 September 2024 ABSTRACT Food inflation poses a significant and multifaceted challenges in Nigeria, with widespread and severe implications for the population. In response, this study examines the influence of the monetary policy rate on food inflation, considering the numerous policy changes from 1990 to 2023. Food inflation serves as the dependent variable, while the independent variables include the monetary policy rate, broad money supply, exchange rate, treasury bills, and agricultural productivity. Utilizing the Autoregressive Distributed Lag (ARDL) technique, the short-run analysis reveals that the monetary policy rate has a significant negative impact on food inflation. In contrast, the exchange rate and broad money supply exhibit a positive but insignificant impact, whereas treasury bills have a significant positive impact on food inflation. In the long run, the ARDL results show that both the monetary policy rate and broad money supply have a negative but insignificant impact, while agricultural productivity exerts a significant negative influence on food inflation. Conversely, the exchange rate has a significant positive impact, and treasury bills, though positive, remain insignificant in their effect on long-run food inflation. Based on these findings, the study recommends that the Central Bank of Nigeria (CBN) utilize the monetary policy rate as an effective short-term tool to manage food inflation. Simultaneously, it is imperative for the federal government to enhance agricultural productivity by improving security in key food-producing regions and reducing dependence on food imports through the promotion of local production. Keywords: Food inflation, monetary policy rate, agricultural productivity, autoregressive distributed lag technique. BACKGROUND TO THE STUDY Inflation raises great concern among policy makers, countries and even individuals, and tackling it has become a core macroeconomic objective in an economy. However, specific concerns on food inflation has become a global issue in recent times following series of notable disruption such as COVID-19 and the conflict between Russia and Ukraine, etc. This issue has always been particularly acute in many developing countries characterized by large populations and limited income levels (Ali, Ullah, Ahmed, Baig, Iqbal & Masood, 2022). Nigeria, sharing these attributes and experiencing a population growth rate of approximately 2.6% annually (World Bank, 2019), faces similar struggles of persistent food inflation. According to Ezebilo, Benedict and Yakubu (2023), the state of food inflation in Nigeria has increased substantially over the past decade. This notion can be depicted in a wide array of instances, the bulk of which includes the persistent hike in the prices of food items in Nigeria currently. Similarly, Central Bank of Nigeria [CBN] (2022) statistics postulates that food inflation increased from 28.5% in 2000 to 108.3% in 2010 and, a whopping 560% in 2022. This report depicts the heightened increase in food inflation, by both double and triple digits commencing from the start of the decade. Food inflation in Nigeria is linked to various internal and external factors. Odoh and Chigozie (2012) highlighted that insecurity, particularly from insurgent groups like Boko Haram and bandits in food-