scholarly journals Impact of Monetary Policy on Bank Credit in Nigeria

2020 ◽  
Vol 3 (3) ◽  
pp. 196-205
Author(s):  
Alade Ayodeji Ademokoya ◽  
Mubaraq Sanni ◽  
Lukman Adebayo Oke ◽  
Segun Abogun
Keyword(s):  
Monetary Policy ◽  
Money Supply ◽  
Time Series Data ◽  
Least Square ◽  
Bank Credit ◽  
Series Data ◽  
Credit Creation ◽  
Lending Rate ◽  
Ordinary Least Square Regression ◽  
The Impact

Objective – The aim of this study is to examine the impact of monetary policy on credit creation ability of banks in Nigeria. Specifically, it investigates the impact of monetary policy rate, money supply, liquidity ratio, and change in maximum lending rate on bank credit in Nigeria. Design/methodology – A monthly time series data from 2007-2019 were sourced from the Central Bank’s of Nigeria statistical bulletin. The sourced data was subjected to multiple regression analysis using the fully modified ordinary least square regression to estimate the parameters of the model. Results – Findings reveal that money supply significantly and positively influence bank credit in Nigeria; while liquidity ratio significantly but negatively influence bank credit in Nigeria. On the contrary, monetary policy rate and maximum lending rate were found not to significantly affect bank credit in the case of Nigeria.Policy Recommendation - Study therefore, recommend that monetary authorities especially, the Central Bank of Nigeria should pay more attention to lowering the liquidity ratio while increasing money supply in order to engender banks credit creation ability and further stimulate the Nigerian economy for growth.

scholarly journals Comparison of the impact of lending and inflation rates on economic growth in Vietnam and China

2020 ◽  
Vol 15 (4) ◽  
pp. 193-203
Author(s):  
Doan Van Dinh
Keyword(s):  
Economic Growth ◽  
Monetary Policy ◽  
Time Series Data ◽  
Close Correlation ◽  
Least Square ◽  
Series Data ◽  
Lending Rate ◽  
Lending Rates ◽  
The Impact

Inflation and lending rates are two important macroeconomic indicators as they affect economic growth. The correlation between the inflation rate and the lending rate in Vietnam and China is analyzed to determine whether the lending rate causes inflation or not. An ordinary least square model (OLS) and a unit root test are applied to check the correlation and cointegration related to the inflation and lending rates to avoid spurious regression. The research time series data were collected from 1996 to 2017. The correlation of Vietnam’s variables is 56%, the correlation of China’s variables is 55%, which is a close correlation. The empirical cointegration test results for Vietnam and China are suitable for two research models. The relationship between these two indicators influences each other. In the short term, inflation stimulates economic growth through loose monetary policy through the lending rate. However, in the long term, if the money supply increases continuously, inflation will slow economic growth and increase bad debt. The empirical results are to make accurate forecasts and determine monetary policy for micro-managers who set the goal of sustainable economic growth and have a strategy for economic development in the short and long term.

scholarly journals Monetary Policy and Nigeria’s Economy: An Impact Investigation

2017 ◽  
Vol 9 (11) ◽  
pp. 218
Author(s):  
Micheal Chidiebere Ekwe ◽  
Amah Kalu Ogbonnaya ◽  
Cordelia Onyinyechi Omodero
Keyword(s):  
Monetary Policy ◽  
Private Sector ◽  
Central Bank ◽  
Money Supply ◽  
Substantial Reduction ◽  
Bank Lending ◽  
Series Data ◽  
Major Objective ◽  
Lending Rate ◽  
The Impact

The major objective of this study is to empirically analyze the impact of monetary policy on the economy of Nigeria. To achieve this major objective, the study made use of broad money supply (M2) and credit to the private sector (CPS) as the independent variables explaining the dependent variable which is the Gross Domestic Product (GDP). The time series data employed cover the period of 1996 to 2016 and have been collected from the Central Bank of Nigeria Statistical Bulletin. The statistical tool used in this study is the multi regression and student t-test with the aid of statistical package for social sciences (SPSS) to analyze the impact of the individual explanatory variables on the economy. The result indicates that the monetary policy in Nigeria does not have significant impact on the economy. At 5% level of significance, the broad money supply (M2) is 0.36 > 0.05 while the CPS shows 0.22 > 0.05. The result proves that the broad money supply has not been properly regulated and the bank lending rate to the private sectors so high that the economy has been adversely affected. The study therefore, recommends that the Central Bank of Nigeria should put every machinery in place to ensure that the monetary policy is geared towards economic growth through substantial reduction of bank lending rate to the private sector and proper regulation of broad money supply.

IMPACT OF MONETARY POLICY TARGETS ON CAPITAL MARKET DEVELOPMENT IN NIGERIA

2021 ◽  
Vol 8 (1) ◽  
pp. 85-95
Author(s):  
Abdulkarim Musa ◽  
◽  
Uwaleke Uche ◽  
Nwala Nneka ◽  
◽  
...  
Keyword(s):  
Monetary Policy ◽  
Money Supply ◽  
Capital Market ◽  
Time Series Data ◽  
Market Development ◽  
Series Data ◽  
Distributed Lag ◽  
Long Run ◽  
Short Run ◽  
The Impact

This study empirically examines the impact of monetary policy targetson capital market development in Nigeria from 1986-2018. Time series data and econometric tools were used to test for the stationarity and causality effect. The Auto-Regressive Distributed Lag Model (ARDL) and Error Correction Model (ECM) techniques were used to examine the short-run and long-run impact and relationship between Monetary Policy and Capital Market Development in Nigeria. The study revealed that both in the long run and short run Exchange Rate (EXCHR), Inflation Rate (INFR), and Interest Rate in Nigeria (INTR)were negatively related to Capital Market Development (CAMKTD) in Nigeria and they were statistically insignificant in explaining changes in Capital Market Development (CAMKTD) in Nigeria. On the other hand, inthe long run, Money Supply was positively related to Capital Market Development (CAMKTD) in Nigeria and was statistically significant at a 5% level significant while Money Supply (M2) was positively related to Capital Market Development (CAMKTD) in Nigeria both in the long run and short-run and was statistically significant at 5% level of significance. Therefore, the study recommends that government should improve the efficiency and effectiveness of the money supply in Nigeria since it was statistically significant in determining the improvement of Capital Market Development (CAMKTD) in Nigeria.

scholarly journals The influence of indirect monetary tools on price and output: the case of Jordan (1993-2013)

2017 ◽  
Vol 12 (1) ◽  
pp. 8-13
Author(s):  
Usama R. Alqalawi ◽  
Hail A. Jemel ◽  
Ahmad A. Alwaked ◽  
Rasha M.S. Istaiteyeh
Keyword(s):  
Monetary Policy ◽  
Money Supply ◽  
Time Series Data ◽  
Jel Classification ◽  
Series Data ◽  
Policy Tools ◽  
Open Market ◽  
Output Level ◽  
Repurchase Agreements ◽  
The Impact

This research aims to identify the main monetary policy tools in Jordan, then, to estimate their effect on price and output level. A time series data covering the period between 1993 and 2013 were utilized to estimate the targeted models using two-step regression. Firstly, the authors measured the impact of indirect policy tools on money supply and, secondly, they determined the impact of money supply on price and output levels. Results show that open market operations of the Central Bank of Jordan through issuance of certificates of deposit, especially at the beginning of 1993 and the repurchase agreements have been effective in influencing the money supply in Jordan. Unfortunately, this policy was not able to control the real or nominal output level even though it has an effect on the price level. Keywords: monetary policy, open market operations, required reserve ratio, discount rate, price and output. JEL Classification: E31, E42, E52, E58

scholarly journals Voluntary Assets and Income Declaration Scheme (VAIDS) and Company Income Tax in Nigeria: A Post-Mortem

2019 ◽  
Vol 6 (10) ◽  
pp. 261-273
Author(s):  
Onwuka Okwara Onwuka
Keyword(s):  
Income Tax ◽  
Time Series Data ◽  
Research Work ◽  
Least Square ◽  
Series Data ◽  
Post Mortem ◽  
Ex Post ◽  
Ex Post Facto ◽  
Ordinary Least Square Regression ◽  
The Impact

Abstract The contribution of taxation to any economy globally cannot be over emphasized.  This research work is on Voluntary Assets and Income Declaration Scheme (VAIDS) and Company Income Tax (CIT): A Post-Mortem. The main objective of this study is to explore the impact of Voluntary Assets and Income Declaration Scheme on company income tax in Nigeria. Time series data were applied in carrying out this research work. Ordinary least square regression analysis was employed in this work with the use of STATA 13 package. The scope of the study is basically focused on the assessment and effect of voluntary assets and income declaration scheme on company income tax in Nigeria from June 2017 to March 2018 a period of 9 months but later extended to July 2018 by the Federal Government of Nigeria. This research focuses on a broad range of issues with the collection of a diversity of data in the field of VAIDS and company income. A literature review was used to determine the theoretical basis for research topic and prior research method conducted on various aspects of relating to VAIDS and company income tax. This work adopted the ex-post-facto research design. The findings reveal that Company Income Tax has an insignificant impact on VAIDS. The work recommends that the voluntary assets and income declaration scheme should be a permanent programme as a separate body should be set up to inspect and ensure the smooth running of the programme.  Key words: VAIDS, Tax, Executive, Order, Income

scholarly journals PENGARUH KEBIJAKAN MONETER DAN FISKAL TERHADAP PENGANGGURAN DI INDONESIA

2021 ◽  
Vol 4 (1) ◽  
pp. 433-442
Author(s):  
Triyas Ayu Hadi Setiowati ◽  
Ris Yuwono Yudo Nugroho
Keyword(s):  
Monetary Policy ◽  
Money Supply ◽  
Impulse Response ◽  
Unemployment Rate ◽  
Government Spending ◽  
Time Series Data ◽  
Variance Decomposition ◽  
Series Data ◽  
Tax Revenue ◽  
The Impact

The purpose of this study is to analyze the impact of monetary policy as seen from the BI Rate and the money supply (M2, and fiscal policy as seen from government spending and tax revenue in influencing the unemployment rate in Indonesia. The approach used in this research is quantitative. The data used are the BI Rate, the money supply (M2), government spending, tax revenue and unemployment in the form of time series data in an annual form from 1995 to 2019. The method used in this study is the Vector Auto analysis model. Regression (VAR). The stages used in this research test are a stationarity test, optimum lag test, VAR stability test, impulse response test, and variance decomposition test. The results of the impulse response indicate that the unemployment variable responds most to the shock of the interest rate variable (monetary policy) compared to other variables. The results of variance decomposition indicate that the contribution given by the BI Rate to the unemployment rate is the most significant relative to the contribution given by the variable money supply (M2), government spending, and tax revenue

scholarly journals REVENUE DISTRIBUTION FROM FEDERATION ACCOUNT AND MONEY SUPPLY: EVIDENCE FROM NIGERIA

10.26458/1914 ◽  
2019 ◽  
Vol 1 (1) ◽  
pp. 65-82
Author(s):  
Cordelia Onyinyechi OMODERO
Keyword(s):  
Money Supply ◽  
Local Governments ◽  
Time Series Data ◽  
Positive Impact ◽  
Least Square ◽  
Series Data ◽  
Federal State ◽  
Monetary Policies ◽  
Revenue Allocation ◽  
The Impact

AbstractMoney supply in every economy is very vital for economic growth and stability.  However, the role of revenue distribution in ensuring the success of monetary policies revolving around money supply in Nigeria cannot be over-estimated.  The study examines the impact of revenue distribution to the three tiers of government on money supply (MSS) in Nigeria.  Time series data used for the study estimation span from 1981-2016 and were obtained from CBN statistical bulletin, 2016 edition and World Bank website.  The specific purpose of the study is to establish the extent to which revenue allocation to federal, state, local governments and derivation allowance to the mineral producing states affect money circulating in the Nigerian economy.  Ordinary least square method (OLS) was employed with the aid of SPSS version 20 to test the impact of revenue distribution on money supply.  The findings reveal that revenue allocation to federal government has a significant positive impact on money supply.  Allocation to local government councils has insignificant positive impact on money supply.  On the contrary, allocation to states and the derivation allowance to Niger Delta States exert significant negative influence on MSS in Nigeria.  The study concludes that, revenue allocation to states and derivation allowance contribute to inflation in the country and recommended stringent monetary policies that will determine the percentage of allocated revenue usage by all tiers of government in a particular period to avoid too much money in circulation.   Keywords:  Revenue distribution, allocation, money supply, economic stability, derivation.JEL CODE: E51, E64.  

scholarly journals A MONETARY ANALYSIS OF GHANA: EXAMINING THE IMPACT AND THE CAUSAL RELATIONSHIP BETWEEN MONETARY POLICY AND INFLATION IN GHANA

2020 ◽  
Vol 4 (1) ◽  
pp. 1-14
Author(s):  
Edmund Obeng Amaning ◽  
Ali Napari Seidu
Keyword(s):  
Monetary Policy ◽  
Interest Rates ◽  
Causal Relationship ◽  
Money Supply ◽  
Time Series Data ◽  
Positive Impact ◽  
Negative Relationship ◽  
Theory And Practice ◽  
Series Data ◽  
The Impact

Purpose: The main objective of the study was to examine the impact and the causal relationship between monetary policy and inflation in Ghana.Methodology: Annual time series data spanning from 1985 to 2017 with Auto Regressive Distributed Lagged (ARDL) model were employed for the analysis.Findings: The outcome from the study shows that, monetary policy rate had insignificant negative relationship with inflation in both the short and the long run. Again, interest rate, domestic investment and money supply were found to have significant positive impact on inflation in both the long and the short run for a specific period chosen for the study.The causal relationship shows that monetary policy rate granger causes money supply within the period understudyUnique contribution to theory and practice: The study recommends that policy makers need to keenly consider the levels of money supply in Ghana so as to ensure a stable retail price levels. The Government of Ghana needs to evaluate the prevailing levels of retail prices and set the interest rates on the 91-day Treasury bills because they are majorly treated as risk free rate hence determines other interest rates and inflation levels in Ghana.

scholarly journals Monetary Policy and Financial Performance of Deposit Money Banks in Nigeria

2020 ◽  
Vol 16 (11) ◽  
pp. 123
Author(s):  
Yimka S. A. Alalade ◽  
Ezekiel Oseni ◽  
Olusegun A. Adekunle
Keyword(s):  
Monetary Policy ◽  
Financial Performance ◽  
Time Series Data ◽  
Least Square ◽  
Series Data ◽  
Net Worth ◽  
Long Run ◽  
Lending Rate ◽  
Short Run ◽  
Reserve Ratio

This study considered the influence of monetary policy on the financial performance of deposit money banks in Nigeria. The study engaged the use of a time series data for 35 years, from the period 1984 to 2018; all deposit money banks as captured by the Central Bank of Nigeria Statistical Bulletin (2015) were considered. The effect of liquidity ratio, lending rate, loan to deposit ratio and cash reserve ratio were examined on the financial performance of deposit money banks measured by their net worth and total credits. The data was analyzed using descriptive and inferential statistics. Based on the result of stationarity test, the ordinary least square method and the Autoregressive Distributed Lag method were employed. A short run model of net worth and long run model for both the log of net worth and the log of total credits were estimated. The results revealed that the mean of net worth and total credits are 5455.27 and 79608.63 respectively. In the long run, monetary policy variables including liquidity ratio, lending rate, loans to deposit ratio and cash reserve ratio had no significant effect on the log of net worth. However in the short run, variations in the liquidity ratio, loans to deposit ratio and the cash reserve ratio for previous years had significant effect on the log of net worth in the current year. When financial performance is measured as total credits, the liquidity ratio and loans to deposit ratio had positive significant effect in the long run. The cash reserve ratio had a negative significant effect in the long run. The log of lending rate was insignificant in both the long and short run. The study concluded that monetary policy significantly explains the financial performance of deposit money banks both in the short and long run.

scholarly journals Effectiveness and Forecasting of Interest Rate Reversal BI 7-Day Repo Rate in Indonesia: Lower Bound on Monetary Policy?

2018 ◽  
Vol 9 (1) ◽  
pp. 171-180
Author(s):  
I Gede Sanica ◽  
I Ketut Nurcita ◽  
I Made Mastra ◽  
Desak Made Sukarnasih
Keyword(s):  
Monetary Policy ◽  
Interest Rate ◽  
Time Series Data ◽  
Moving Average ◽  
Series Data ◽  
Autoregressive Integrated Moving Average ◽  
Implementation Of Monetary Policy ◽  
Repo Rate ◽  
The Right ◽  
The Impact

AbstractThis study aims to analyze effectivity and forecast of interest rate BI 7-Day Repo Rate as policy reference in the implementation of monetary policy. The method was used in this study contains Vector Autoregression (VAR) to estimate effectivity of BI 7-Day Repo Rate and Autoregressive Integrated Moving Average (ARIMA) to forecast of BI 7-Day Repo Rate. Period of observation in this study used time series data during 2016.4 until 2017.6. The result of this research shows that the transformation of the BI Rate to BI 7-Day Repo Rate is the right step in the monetary policy operation in the effort to reach deepening of the financial market and strengthen the interbank money market structure so that it will decrease loan interest rate and encourage credit growth. The effectiveness of the use of BI 7 Day-Repo Rate on price stability is indicated by the positive relationship between the benchmark interest rate and inflation compared to the BI Rate. The impact of BI 7-Day Repo Rate on economic growth that tends to be positive. Forecasting the use of BI 7-Day Repo Rate shows good results with declining value levels, so this will encourage deepening the financial markets.

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