TITLE:
Relationship between Monetary Policy Instruments and Financial Performance of Commercial Banks in Nigeria
AUTHORS:
Adamu Ibrahim Shirya, Charity Njoka, Farida Abdul
KEYWORDS:
Commercial Banks, Financial Performance, Open Market Operations, Monetary Policy Reforms
JOURNAL NAME:
Open Journal of Business and Management,
Vol.11 No.3,
May
16,
2023
ABSTRACT: This paper examined the relationship between
monetary policy instruments and financial performance of commercial banks in
Nigeria. The study was anchored on Keynesian theory and employed causal
research design. The Nigerian banking populace is 21 commercial banks, so census approach was adopted. Panel data was utilized and inferential
statistical methods were used to analyze the data. The result of regression
analysis showed that open market operations had a coefficient of β = 4.851167,
***p = 0.000 implying that it had positive
and significant effect on the earning performance of commercial banks in
Nigeria. The results also show that monetary policy reforms had positively and
significantly intervened on the relationship between open market operations and
financial performance of commercial banks in Nigeria of a most distinctive finding of the study. The study concluded that
monetary policy instruments as adopted by Central Bank of Nigeria are critical
and heavily influenced the performance of banking sector players in Nigeria.
The study recommends that Central Bank of Nigeria should be meticulous and
involve management of commercial banks when designing policy instruments to
enhance the earnings of the commercial banks in Nigeria.