This study investigates the potential impact of monetary policy on food prices in case of Pakistan in long run and short run by using Johansen cointegration technique and vector error correction model respectively. Monthly time series data from July 1991 to December 2010 on four variables namely Money Supply (M2), Nominal Exchange Rate, Food Prices, Manufacturing Goods Prices has been used. This study found that there exist significant long run relationship between food prices and money supply. Money supply positively affects food prices in the long run in case of Pakistan. Study also found that the seasonal variations are responsible for short variations in the food prices. Supervisor:- Dr. Abdul Qayyum