International Journal of Academic Multidisciplinary Research (IJAMR)   Year: 2022 | Volume: 6 | Issue: 12 | Page No.: 311-320 Globalization and Monetary Policy in Nigeria Download PDF Idongesit Edem Udoh, Ubong Edem Effiong & John Polycarp Ekpe Abstract: In this paper, the influence of globalization on monetary policy in Nigeria is explored for the period 1986 through 2020. The variables that were used in capturing globalization include trade openness, remittances, and foreign direct investment; while monetary policy was measured using the real interest rate. The study utilized the autoregressive distributed lag approach (ARDL) of bounds testing for cointegration and the error correction model, given that the variables were stationary in mixed order of levels and first difference as reported by the augmented Dickey-Fuller unit root test. Findings from the bounds test revealed that a long-run relationship exist among the variables of interest. Further, the short-run ARDL model revealed that foreign direct investment has a positive and significant influence on the real interest rate while the effect of trade openness and remittances are negative and also significant. In the long-run, the effect of foreign direct investment on real interest rate remains positive but insignificant, while the effect of trade openness remained negative and significant. The study concluded that an increases in globalization through foreign direct investment (financial globalization) could increase domestic interest rate while its effect through trade openness (trade liberalization) could lead to a reduction in the domestic rate of interest.