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The Effect of Monetary Policy on the Nigerian Deposit Money Bank System

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  • Alex Ehimare Omankhanlen

    (Department of Banking and Finance, Covenant University, Ota, Ogun State, Nigeria)

Abstract

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.

Suggested Citation

  • Alex Ehimare Omankhanlen, 2014. "The Effect of Monetary Policy on the Nigerian Deposit Money Bank System," International Journal of Sustainable Economies Management (IJSEM), IGI Global, vol. 3(1), pages 39-52, January.
    • Handle: RePEc:igg:jsem00:v:3:y:2014:i:1:p:39-52
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    File URL: http://services.igi-global.com/resolvedoi/resolve.aspx?doi=10.4018/ijsem.2014010104
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    Cited by:

    1. Thanh Nhan Nguyen & Ngoc Huong Vu & Ha Thu Le, 2017. "Impacts of Monetary Policy on Commercial Banks’ Profits: The Case of Vietnam," Asian Social Science, Canadian Center of Science and Education, vol. 13(8), pages 1-32, August.

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