Abstract:

Monetary policies are major tools utilized by sovereign nations in achieving specific macroeconomic goals. This study examines the effect of monetary policies on the growth of the agricultural sector in Nigeria. Utilizing yearly data from 1986 – 2016, this study empirically investigates the impact of monetary policy on agricultural growth in Nigeria using auto regression distribution lag (ARDL) and granger casualty test. The study finds that a long-run and unidirectional relationship exist between the variables implying that a unidirectional relationship exist between the rate of interest and agricultural output. The results from granger causality test indicate that past values of agricultural output impacts present value of interest rate. The study concludes that it is important that policymakers in the agricultural sector and monetary authorities in Nigeria as well as other participants in the economy to carefully access the interaction between the monetary policies and the agricultural sector.