EFFECT OF MONETARY POLICY ON THE FINANCIAL PERFORMANCE OF DEPOSIT MONEY BANKS IN NIGERIA
Abstract
ABSTRACT
This research was carried out to examine the effect of monetary policies on the financial performance of Deposit Money Banks in Nigeria. The specific objectives were; to ascertain the effect of cash reserve ratio (CRR) on the financial performance of Deposit Money Banks in Nigeria, to determine the effect of open market operation (OMO) on the financial performance of Deposit Money Banks in Nigeria and to examine the effect of money supply (MS) on the financial performance of Deposit Money Banks in Nigeria. The study adopted ex-post facto research design. Multiple regression analytical tool was used in analyzing the data. The population of the study consisted of the forty-four (44) DMBs in Nigeria, the sample size of five (5) deposit money banks was drawn from the population. The data for the analysis was sourced from the CBN annual reports and accounts and from the CBN statistical bulletin from 2018 till 2022. The study findings were; cash reserve ratio (CRR) have a significant effect on the financial performance of Deposit Money Banks in Nigeria, open market operation (OMO) have a significant effect on the financial performance of Deposit Money Banks in Nigeria and money supply (MS) have a significant effect on the financial performance of Deposit Money Banks in Nigeria. The study also concludes that monetary policy instruments have significant impact on the performance of deposit money banks in Nigeria. It was recommended that cash reserve ratio (CRR), open market operation (OMO), money supply (MS) should be revised by monetary authority for liberal to loan advancement especially relating to the private sector.
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