EFFECT OF MONETARY POLICY RATE ON TOTAL DOMESTIC BANK CREDIT IN NIGERIA, 1983 TO 2021
Keywords:
Effect, Monetary policy rate, Domestic bank credit and LiquidityAbstract
This study examined the effect of monetary policy rate on total domestic bank credit in Nigeria. The specific objective was to examine the effect of monetary policy rate on the total domestic credit amid other variables from 1983 to 2021. This also formed the research question and hypothesis accordingly. This research applied the ex-post facto research design and the study used secondary data collected from the Nigerian Statistical Bulletin for the year 2022. The data collected were subjected to descriptive tests and multiple regression analysis using E-views model to test the hypothesis. The findings of the study revealed that monetary policy rate does not have a positive and significant effect on total domestic bank credit from 1983 to 2021, interest rate has a positive and significant effect on total domestic bank credit from 1983 to 2021 and liquidity ratio does not have a significant effect on total domestic bank credit from 1983 to 2021. The study found that monetary policy as a whole had significant effect on the total domestic bank credit, because decreasing monetary policy rate translated to increasing total domestic bank credit in Nigerian banks. Based on the findings, it was recommended that the government and its monetary authorities should create a conducive environment for banking sectors to grow in the country by allowing a monetary policy rate that would guarantee and enhance the growth and development of the banking sector.Downloads
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