Main Article Content
This paper examined the effectiveness of monetary policy in enhancing the performance of the Nigerian Commercial Banks in terms of domestic savings mobilization for the period 1980 to 2019. The monetary policy variables used were, monetary policy rate, treasury bill rate and money supply growth. Applying Autoregressive Distributed Lag Technique on the variables, we found that overall, monetary policy conduct was ineffective in enhancing commercial banks performance in domestic savings mobilization over the period. Our result shows that throughout the study, key variables of monetary policy were weak in driving domestic savings in Nigeria. Monetary policy rate variances only produces short term deposit impact that fades away over time. However, the economy’s level of income showed evidence of accelerating domestic savings. Hence, to deepen domestic savings mobilization in Nigeria, we recommend income policies that drive domestic savings in the economy such as equitable redistribution of income that made financial inclusion pro-poor, among other things.
Ndugbu MO, Okere PA. Monetary policy and the performance of deposit money banks - the Nigerian Experience, European Journal of Business and Management. 2015;7(17):65-72.
Onodugo IC, Okoro OEU, Amujiri BA, Onodugo VA. Impact of Monetary Policy Regimes on Performance of Commercial Banks in Nigeria. Management Strategies Journal. 2016;32(2):15-29.
Obioma J, Onyebueke C. Bank asset quality performance among Nigerian Banks - The Role of Monetary Policy, IIARD International Journal of Banking and Finance Research. 2018;4(1):1-31.
Bassey GE, Ekong UM. Monetary policy and bank performance in Nigeria: A vector autoregression (VAR) Approach. International Journal of Economics & Finance Research & Applications. 2019;3(1):11-34.
Gjonnes SK. Mobilizing for development: Assessingthe impact of Public Saving Instiutions in determining National Savings levels, Institut Barcelona Estudis Internacionals Student Paper Series no. 26; 2016. Available:http://www.kse.org.ua June, 2020.
Modigliani, Franco. The life cycle hypothesis of saving, the demand for wealth and the supply of capital. Social Research. 1966;33(2):160–217.
Deaton A. Savings and Growth, In: Schmidt-Hebbel, K. and Serven, L. (eds). The economics of saving and growth: Theory, evidence, and implications for policy. Cambridge University Press. 1999;Chapter 3.
Gutiérrez M. Savings in Latin America after the mid 1990s: determinants, constraints and policies, Santiago: UNECLAC; 2008.
Dupas P, Robinson J. Why don't the poor save more? Evidence from health savings experiments. American Economic Review. 2011;103(4):1138 – 1171.
Corsepius U, Fischer B. Interest Rate Policies and Domestic Savings Mobilization: A survey of the empirical evidence of Asian countries, Kiel Working Paper, No. 267; 1986. Institut für Weltwirtschaft (IfW), Kiel. Available:http://hdl.handle.net/10419/46898, 12.03.2020.
Wai UT. Financial intermediaries and national savings in developing countries, New York, Palgrave. 1972;160-168.
Tsiang SC. Interest rate and consumption: A comment. International Economic Review. 1973;14 (2):493-496.
Olson M, Bailey MJ. Positive time preference. Journal of Political Economy. 1981;89(1):1-25.
Hayashi F. Why is Japan's saving rate so apparently high? N.B.E.R. Macroeconomics Annual. 1986;1147-1210.
Barro RJ. Are government bonds net wealth? Journal of Political Economy. 1974;82(6):1095 -1117.
Kennickell A, Ando A. How much (or little) life cycle is there in micro data? The case of the United States and Japan, In Macroeconomics and finance: essays in honor of Franco Modigliani. R. Dornbush, S. Fisher and J. Bossons, eds, Cambridge, M.I.T, Press. 1987;159-223.
Gersovitz M. see Pierre-Richard Agenor and Peter J. Montiel (1996), Development Macroeconomics. 1988;76:641.
Kotlikoff L, Summers L. The role of intergenerational transfers in aggregate capital accumulation. Journal of Political Economy. 1981;89(4):706-732.
Koulibaly M. An approach to interpersonal transfers in Black Africa, Political Economy Review. 1997;107(3):395-418.
Gaire HN. Real interest rate and savings behaviour in Nepal. Banking Journal. 2012;2(1):16-34.
Okere PA, Ndugbu M. Macroeconomic variables and savings mobilization in Nigeria, International Journal for Innovation Education and Research. 2015;3(1):106-116.
Ojeaga P, Ojeaga D, Odejimi DO. The Impact of Interest Rate on Bank Deposits Evidence from the Nigerian Banking Sector, Munich Personal RePEc Archive (MPRA) paper No. 53238; 2013. Available:https://mpra.ub.uni-muenchen.de/53238/ 02.2020.
Hassan OM. Effect of Interest Rate on Commercial Bank Deposits in Nigeria (2000-2013), Proceeding of the First American Academic Research Conference on Global Business, Economics, Finance and Social Sciences (AAR16 New York Conference) New York, USA; 2016. 25-28 May, 2016, Available: www.globalbizresearch.org 02.2020.
Obi CO, Ezeanyeji CI. Interest rate deregulation and savings mobilization in Nigeria: An impact analysis. International Journal of Applied Research. 2019;5(3):186-193.
Sunday KU. The Impact of Interest Rates on Savings and Investment in Nigeria, Unpublished M. Sc. Thesis; 2012. Available:www.globalbizresearch.org February 2020.
Soyibo. The savings-investment process in Nigeria: An empirical study of the supply side. African Economic Research Consortium (AERC) Research Paper Series no 100278; 1994.
Reinhart CM, Takatlidis I. Before and after financial liberalization; 2001. Available:http://www.puaf.umd.edu/faculty/papers Accessed: 20 May, 2020.
Bandiera G, Caprio PH, Schiantarelli G. Does financial reform raise or reduce saving?, Review of Economics and Statistics. 2000;82(2):239-263.
Okumoko TP, Akarara EA. The impact of monetary policy rate on savings and investment in the Nigerian economy. FUNAI Journal of Humanities and Social Sciences. 2016;2(1):39-53.
Ogbulu OM, Uruakpa PC, Umezinwa CL. Empirical investigation of the impact of deposit rates on fund mobilization by deposit money banks in Nigeria, Journal of Finance and Bank Management. 2015;3(1):77-89.
Jacob BJ, Ishaya Y, Innocent IO. Effect of deposit mobilization and credit financing of commercial banks on capital formation in Nigeria. International Journal of Small and Medium Enterprises. 2019;2(1): 47-55.
Duguma GJ, Han J. Effect of deposit mobilization on the financial sustainability of rural saving and credit cooperatives: Evidence from Ethiopia. Sustainability. 2018;10(3387):1-23.
Most read articles by the same author(s)
- Uduak Michael Ekong, Uduak Effiong Isaac, Samuel Effiong Isaac, Energy Consumption and Sectoral Performance in Nigeria: New Growth Evidence from an ARDL Model for Consideration , Asian Basic and Applied Research Journal: 2021 - Volume 4 [Issue 2]
- Uduak Michael Ekong, Emmanuel Ogbe, Samuel Effiong Isaac, Does Cryptocurrency Transactions Benefit ICT Businesses in Uyo Metropolis: Evidence from a Field Survey , Asian Research Journal of Current Science: 2021 - Volume 3 [Issue 1]