ASSESSING THE IMPACT OF MONETARY POLICY ON ECONOMIC INEQUALITY IN NIGERIA

The focus of this study was to evaluate the role of monetary policy in addressing economic inequality in Nigeria. The specific objectives were to: examine the effect of private sector credit on economic inequality in Nigeria, evaluate the effect of bank lending rate on economic inequality in Nigeria, ascertain the effect of money supply on economic inequality in Nigeria, and determine the effect of exchange rate on economic inequality in Nigeria. The study adopted quantitative research using ex post facto design. The major findings of the study are: bank lending rate has a positive and significant effect on inequality, private sector credit showed a strong, significant, and negative effect on inequality, money supply has significant negative impact on inequality, and exchange rate exhibited significant, negative effects on inequality. The study concluded that monetary policy plays significant role in addressing economic inequality in Nigeria. based on the findings, the study recommended that: the Central Bank of Nigeria should prioritize policies that enhance the volume and distribution of credit to the private sector, Policy makers must exercise caution when using the Bank Lending Rate for stabilization, the CBN should acknowledge the potential pro-equality effect of a weaker exchange rate on the primary commodity sector, and Policy should be structured to maximize the income gains for local producers from Naira depreciation while concurrently implementing targeted measures (e.g., subsidies or cash transfers) to mitigate the inevitable inflationary pressure on basic consumer goods consumed by the poor.