MONETARY POLICY AND DEPOSIT MONEY BANKS PERFORMANCE IN NIGERIA

Authors

  • DAVIS OJIMA Department of Economics, Ignatius Ajuru University of Education, Port Harcourt, Nigeria.
  • EMMANUEL IFEANYI AJUDUA Department of Economics National Open University of Nigeria, Jabi-Abuja, Nigeria.

Keywords:

Deposit Money Banks, Monetary Policy, ECM

Abstract

The paper examined the impact of monetary policy on the performance of deposit money banks in Nigeria from 1990 to 2022. Employing deposit money bank’s asset as the dependent variable and monetary policy rate, cash reserve ratio, liquidity ratio and treasury bill rate as the independent variables, the study utilized the Error Correction Mechanism estimation techniques to ascertain the relationship between the dependent and independent variables sourced secondarily from the Central Bank of Nigeria Statistical Bulletin. Findings from the study showed that all the independent variables were correctly signed, and had a significant impact on deposit money banks in Nigeria during the period of study. Based on the findings, the study recommends that the monetary policies of the nation and its monetary instruments should be well managed such that the effects of monetary policy variables (MPR, CRR, LR, and TBR) on deposit money banks' assets (DMBA) should be taken into account by policymakers while developing and executing monetary policies. Also, continuous monitoring of the short-run dynamics is essential for understanding and responding to changes in the relationship between monetary policy and deposit money bank performance while strategies should be developed to manage short-term fluctuations and ensure stability and sustainability in the banking industry over the medium to long-term

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Published

2024-09-06

How to Cite

DAVIS , O., & EMMANUEL , I. A. (2024). MONETARY POLICY AND DEPOSIT MONEY BANKS PERFORMANCE IN NIGERIA . JOURNAL OF ECONOMICS AND ALLIED RESEARCH, 9(2), 16–26. Retrieved from https://jearecons.com/index.php/jearecons/article/view/398

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