THE IMPACT OF MONETARY POLICIES ON THE LIQUIDITY AND PROFITABILITY OF DEPOSIT MONEY BANKS IN NIGERIA

This research examined the impact of monetary policies on the liquidity and profitability of commercial banks in Nigeria in Nigeria. Specifically, the study establishes the effect of Central Bank Rate (CBR) on the liquidity and profitability of commercial banks, it also establishes the effect of Reserve Ratio Requirement on the liquidity and profitability of commercial banks. The methodology used for data collection was mainly from primary source which included questionnaire and personal interview in order to have knowledge of Monetary Policy on the financial performance in Union Bank Plc. Information was also gathered from the secondary source which includes literature review of previous research, consultation of textbooks and internet. Simple percentage and Chi-square statistical method were used to analyse the data collected before reaching conclusion. The findings of the research indicated that deposit money bank policy affect banking operations in its bid to regulate money supply in the economy with particular reference to deposit and credit creation. The recommendation is that while bank size was found to lead to better financial performance, it is important that banks understand the source of its funds and the costs associated with the funds.