Effect of monetary policies on liquidity management of financial institutions in Nigeria
Nwoko Cyprain NJ, Okuma N Camillus, Chinedu Blessing-Mike Obialor
The study focused on impact of monetary policies on liquidity management employed by financial institutions in Nigeria. The study sought to determine the impact of minimum rediscount rate and Treasury bill on liquidity management employed by financial institutions.The study adopted Expo- factor research design. The study used secondary data and multiple regressions were deployed in testing the hypothesis. The findings indicated that minimum rediscount rate and Treasury bill have a positive impact on liquidity management employed by financial institutions(r = 0.82).The study concluded that Banks’ liquidity management is central to the transmission and implementation of regulatory authorities. By affecting the trade-off between lending and holding liquid assets, central banks affect the supply of loanable funds, and through this channel they affect the real economy. The study recommended that all financial institutions should adhere to policies and regulations mapped out by the central bank of Nigeria in order to avoid banks distress.