Monetary Control and Commercial Banks’ Performance in Nigeria

Abstract

The study was carried out to examine the impact of monetary control (policy) on commercial banks’ performance in Nigeria in a micro-panel analysis. Discount rate, open market operation, bank reserves requirement and money supply were used as proxies for monetary policy, while bank return on assets and loan advances used to represent commercial banks’ performance. he unit root, Johansen co-integration tests OLS estimates and hypothesis testing was carried out The results show that there is a positive relationship between banks’ return on asset, loan advances and monetary controls (policies) as proxied by open market operation, discount rate, bank reserve requirement. However, bank reserve requirement was not statistically significant at 1% and 5% levels in terms of bank return on asset. This study therefore, recommended that, there should be increase in open market operation that is, there should be increase in the volume of treasury bills that is being sold out by the government to the public as this affect commercial banks performance positively.