Monetary Policy and Banking Performance in Nigeria (2014-2023)

ABSTRACT The study examined the relationship between monetary policy and banking performance in Nigeria from 2014–2023. The main objective of the study was to examine the effect of Monetary Policy Rate (MPR) on bank performance in Nigeria, to assess the effect of exchange rates on bank performance in Nigeria. Secondary data is used to test the formulated hypotheses. Monetary Policy Rate, Exchange Rate, Money Supply and Inflation Rate, were examined on Return on Asset. Using Ordinary Least Square (OLS) technique of the Statistical Package for Social Science (SPSS). The result of the analysis shows that monetary policy proxied by exchange rates and monetary policy rates (prime lending) exerts a positive effect on economic growth while inflation rates has negative impact on Nigeria economic growth. The recommendations are that Monetary policies should be used to create favourable investment climate by facilitating the emergence of market based interest rate and exchange rate regimes that attract both domestic and foreign investments, create jobs, promote non-oil export and revive industries that are currently operating far below installed capacity. In order to strengthen the financial sector, the Central Bank has to encourage the introduction of more financial instruments that are flexible enough to meet the risk preferences and sophistication of operators in the financial sector.