The study explores the impacts of systematic and nonsystematic monetary policy shocks and how they affect the monetary transmission process in Nigeria from 1986 to 2020 using quarterly data. The objective of the study was to improve the understanding of the systematic and non-systematic monetary shocks and how they affect the monetary transmission process in Nigeria. Data on variables such as monetary policy rate, all-share index, exchange rate, private sector credits, and inflation rate were used to investigate the impact of these shocks on monetary transmission channels. The study adopted methods such as unit root, historical decomposition as well as a non-linear Autoregressive Distributed Lag (NARDL) framework to carry out this investigation. The results showed that both the systematic and nonsystematic shocks influenced interest rate and expectations channels, while the negative systematic shocks influenced the credit channel. However, these shocks had no significant influence on exchange rate and asset price channels. The study was concluded by recommending that these channels should be well managed to avoid negative systematic and nonsystematic shocks to improve the monetary transmission process and foster a sound financial system in Nigeria.

This study investigated the response of the different monetary policy channels to several macroeconomic variables in Nigeria and established the dominant channel on output from the period of 1986 to 2017 using quarterly data. Variables such as private sector credit, inflation rate, monetary policy rate, exchange rate, all share index and real output were used to carry out this investigation. The study adopted the structural break and structural VAR methods in achieving the objectives and found a significant standard deviation real effect on each monetary policy channel in the short term, while it also found that innovations arising from a channel itself caused the greatest shock on its future values. The findings further demonstrated that each monetary policy channel had a weak influence on output, with interest rate channel being the dominant channel of monetary policy on output. Finally, the paper suggested that the monetary authority should keep using interest rate as the major policy anchor through which monetary impulses are transmitted into the economy.