The Impact of Quantitative Tools of Monetary Policy on the Performance of Deposit Money Banks in Nigeria (1986-2019)
Jisike Jude Okonkwo
Department of Banking and Finance, Nnamdi Azikiwe University, Awka, Nigeria.
Okere Wisdom *
Department of Accounting, Bells University of Technology, Ota, Ogun State, Nigeria.
John Nonso Okoye
Department of Banking and Finance, Nnamdi Azikiwe University, Awka, Nigeria.
*Author to whom correspondence should be addressed.
Abstract
The goal of this study is to provide empirical evidence about the impact of commercial bank Treasury bill subscription, monetary policy rate, liquidity ratio, and cash reserve ratio on the profitability of Nigerian deposit money banks. The ex post facto research design was adopted for this investigation. Ordinary Least Square was utilized for a regression analysis of the data. According to the results, there is a strong correlation between treasury bills subscription and private sector lending. The research found that the cash reserve ratio correlates highly with private sector lending. The research suggests that the Nigerian government implement measures that would assist deposit money institutions in the country to enhance their lending facilities, particularly for the private sector. To make bank borrowing appealing and inexpensive for investors, the monetary authority must also appropriately handle the quantitative instruments of monetary policy.
Keywords: Treasury bill, monetary policy rate, liquidity ratio, ordinary least square, deposit money banks.