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African Journal of Business Management Vol. 6(51), pp. 12038-12042, 26 December, 2012 Available online at http://www.academicjournals.org/AJBM DOI: 10.5897/AJBM11.1843 ISSN 1993-8233 ©2012 Academic Journals

Full Length Research Paper

Analysis of monetary policy on commercial banks in Nigeria
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Akanbi T. A.* and Ajagbe F. A.
Department of Management and Accounting, Ladoke Akintola University of Technology, Ogbomosho, Oyo State, Nigeria.
Accepted 9 October, 2012

This study investigates analysis of monetary policy on commercial banks in Nigeria. The study employed three commercial banks in the Nigeria financial system, that is, the first generation banks. The employed data run through 1992 to 1999 and this was collected through various issues of central bank of Nigeria statistical bulletin and analysed with the use of regression model. The results showed net profit, liquidity ratio, cash ratio and interest rate on savings which confirms to the prior expectation. This could be further explained with the regression estimate whereby an increase in interest rate will leads to a decrease in the lending rate while liquidity ratio and cash ratio were statistically significant to the profit of the selected banks. Key words: Monetary policy, commercial bank, Central Bank of Nigeria (CBN), Nigeria.

INTRODUCTION Monetary Policy is an instrument given to the Central Bank of Nigeria (CBN) by the federal government that is, it is a function which is a documentary policy to control the aggregate demanded in the circulation or cost. The policy is to see to the stability in wages and prices of goods and services. It is also necessary to control the volume of money in circulation and to give the domestic money a value via other controls. In the monetary policy, there are many tools used in the Central Bank of Nigeria (CBN) to achieve the over all objective. Fiscal policy is used in order to compliment the effect of monetary policy of the Central Bank of Nigeria (CBN).

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