NAVIGATING ECONOMIC TURBULENCE

This paper explores the intricate relationship between economic policy and social stability, focusing on the impact of monetary policy tools on social insecurity in Nigeria from 1990 to 2022. By examining data from the Central Bank of Nigeria Statistical Bulletin and the World Bank Development Indicators, this study investigates how key monetary tools-Monetary Policy Rate, Broad Money Supply, Cash Reserve Ratio, and Treasury Bill Rate affect unemployment, used as a proxy for social insecurity. Using the Augmented Dickey-Fuller Unit Root and Auto-Regressive Distributed Lag (ARDL) techniques, the study confirms that these monetary tools and social insecurity lack long-term co-integration, meaning they do not move in sync over time. However, short-term insights reveal that the Cash Reserve Ratio and Treasury Bill Rate significantly reduce unemployment, while the Monetary Policy Rate increases it. The Broad Money Supply, though negatively associated with unemployment, shows no significant impact. The findings underscore that targeted adjustments in monetary policy can exacerbate social stability. It is recommended that the Central Bank of Nigeria carefully consider changes to the monetary policy rate to boost economic activity while safeguarding price stability. This approach may help mitigate unemployment, thereby addressing a key factor in social insecurity.