Role of Money Market in Economic Development of Nigeria
Discount Houses Operations, the Money Market and the Nigerian Economy: A Preliminary Investigation
C. B. Ezirim and F. E. Enefaa
Abstract
This paper investigates the relationships subsisting between the operations of discount houses and the performance indices of the money market and the general economy. The method used involved the estimation of regression models and subsequent analysis of results using conventional statistics. The findings indicate that positive and significant relationships existed between the indicators of discount houses and those of the money market and the macro economy. Thus, the operations of these houses reserve the potentials to boost the performances of the money market and the economy considerably. This calls for policy options that would favor the encouragement of existing houses and licensing of new ones to adequately carter for the needs of the overall economy.
Introduction
It has been underscored that discount houses play very important roles in stimulating investments in the economy and in boosting the general operations of the money market. Not only do they serve as catalyst in the market, they are, on their own, large-scale investors in the money market as well. Their role in facilitating profitable open market operations is worth stressing (CBN, 2004; Ezirim, 2005). Notwithstanding these and other roles performed by discount houses in a typical economy, the Nigerian money market operations are said to be sub-optimal in terms of engineering desired growth in the economy. The observed sub-optimality of the Nigerian money market is blamed, in part, on the poor performance of discount houses and other money market institutions. Discount houses, from the onset of their operations in the country, were expected to cause the Nigerian money market to operate optimally. Since the money market is yet to achieve this objective, can we then say that the discount houses have failed in their expected duties? It is the burden of this study
C. B. Ezirim and F. E. Enefaa
Abstract
This paper investigates the relationships subsisting between the operations of discount houses and the performance indices of the money market and the general economy. The method used involved the estimation of regression models and subsequent analysis of results using conventional statistics. The findings indicate that positive and significant relationships existed between the indicators of discount houses and those of the money market and the macro economy. Thus, the operations of these houses reserve the potentials to boost the performances of the money market and the economy considerably. This calls for policy options that would favor the encouragement of existing houses and licensing of new ones to adequately carter for the needs of the overall economy.
Introduction
It has been underscored that discount houses play very important roles in stimulating investments in the economy and in boosting the general operations of the money market. Not only do they serve as catalyst in the market, they are, on their own, large-scale investors in the money market as well. Their role in facilitating profitable open market operations is worth stressing (CBN, 2004; Ezirim, 2005). Notwithstanding these and other roles performed by discount houses in a typical economy, the Nigerian money market operations are said to be sub-optimal in terms of engineering desired growth in the economy. The observed sub-optimality of the Nigerian money market is blamed, in part, on the poor performance of discount houses and other money market institutions. Discount houses, from the onset of their operations in the country, were expected to cause the Nigerian money market to operate optimally. Since the money market is yet to achieve this objective, can we then say that the discount houses have failed in their expected duties? It is the burden of this study
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