The aim of the study is to find the empirical analyses of the impact of oil price fluctuation on the monetary instrument in Nigeria, by looking at their relationships. Specifically, we analyzed the role of Exchange rate, Inflation, Interest rate and how they respond to shocks in oil price. We explored the frequently used Toda–Yamamoto model (TY), by adopting the TY modified Wald (MWALD) test approach to causality, forecast error variance decomposition (FEVD) and impulse response functions (IRFs). The study covered the period Q1 1995-Q4 2018, and our findings from MWALD test indicated that there is a uni-directional causality at 5% level of significance a response of lnintr due to positive change in lnoilpr and next, and the combination of variables with lnintr as a dependent variable contributed to it changes. | The effect of oil price fluctuation on the economy of Nigeria -