The Effect of Monetary Policy on the Nigerian Deposit Money Bank System
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IGI Publishing
Abstract
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This study investigates the effect of monetary policy on the Nigerian Deposit Money Bank (DMB) System. The
Nigerian banking system is currently under-going a series of reforms in order to enhance its competitiveness
and efficiency. The Ordinary Least Square (OLS) method is used to examine the effect of monetary policy on
the Nigerian Deposit Money Bank System, using such variables as total loans and advances (TLA) as dependent
variable and liquidity ratio (LR),cash reserve ratio (CRR), monetary policy rate (MPR), and average
exchange rate (AER) as independent variables. The result of the findings shows that monetary policy rate
reveal the most significant effect on commercial banks loans and advances during the period under study. The
study thus recommends, among others, that the regulatory authority Central Bank of Nigeria should create
credit procedures, policies and analytical capabilities which should be entrenched in the credit management
of DMB s operations
Keywords
HJ Public Finance