TY - JOUR AU - Aginam, Chinagorom Judith AU - Obi-Nwosu, Victoria O PY - 2019/08/26 Y2 - 2024/03/29 TI - EFFECT OF MONETARY POLICY ON THE PERFORMANCE OF DEPOSIT MONEY BANKS IN NIGERIA: 1987- 2017 JF - ZIK JOURNAL OF MULTIDISCIPLINARY RESEARCH JA - ZJMR VL - 2 IS - 1 SE - Articles DO - UR - https://journals.aphriapub.com/index.php/ZJMR/article/view/951 SP - AB - <p>This study examined the effect of monetary policy on banks performance in Nigeria. The<br>variables of monetary policy rate, liquidity ratio, broad money supply and interest rate were<br>regressed on return on equity (ROE) for the period of 30 years (1987- 2017). The study adopted<br>an ex-post facto research design because the data for the study are secondary data that already<br>existed. Econometric techniques, including Augmented Dicker Fuller and Philip Perron tests for<br>unit roots and Ordinary Least Square (OLS) were employed for the analysis. The result of the<br>study indicate that monetary policy rate, liquidity ratio and broad money supply have positive<br>and significant effect on return on equity (ROE) while interest rate has negative and<br>insignificant effect on return on equity (ROE) within the period under review. The study thus<br>concludes that monetary policy can be used to influence the performance of deposit money<br>banks in Nigeria. The study recommends that interest rate should be reduced to a single digit.<br>Bank management should ensure that capital is properly channeled to the productive sector of<br>the economy. The relevant monetary authorities should apply with caution monetary policy<br>variables to significantly influence commercial banks loans and advances. Expansionary<br>monetary policy should be adopted by the CBN to force down interest rate and increase money<br>supply because a fall in the bank rate will reduce interest on loans made by commercial banks.<br>This will encourage more customers to secure loans from their banks thereby, increasing<br>investment opportunities in the country, ceteris paribus.</p> ER -