Effects of monetary policy on performance of Nigerian deposit money banks

Abstract

This study investigated performance of Nigerian deposit money banks from 1989 to 2019 and the impact of monetary policy on it. Data for this study were collected from the Central Bank of Nigeria (CBN) statistical bulletin 2019.The Augmented Dicker Fuller (ADF) unit root test, Autoregressive distributed lag (ARDL), bounds test, cointergrating and long run form test were used to evaluate the impact of monetary policy on the performance of deposit money banks. The Augmented DickerFuller (ADF) unit root test proved that the variables are I (0) and I (1) hence stationary. Also, the ARDL test and bounds test reveals that long run relationship exists among the variables. The results revealed that in the long run, the result of the estimated coefficients of
the long run relationship exhibits that BDR and LQR are significant and exhibits a negative relationship with TBD while CRR is significant and exhibits positive relationship with TBD and BLR also exhibits positive relationship TBD but is not significant. On this basis, the study recommends among others that Central Bank of Nigeria (CBN) should moderate the deposit rate as an instrument for regulating deposit money banks operations and performance.