Monetary Policy and Domestic Savings Mobilization in Nigeria: Evidence from an ARDL Estimation
Uduak Michael Ekong *
Department of Economics, Faculty of Social Sciences, University of Uyo, Uyo, Akwa Ibom State, Nigeria.
Enobong Udeme Mbobo
Department of Economics, Faculty of Social Sciences, University of Uyo, Uyo, Akwa Ibom State, Nigeria.
*Author to whom correspondence should be addressed.
Abstract
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.
Keywords: Domestic savings mobilization, commercial banks performance, monetary policy, deepen domestic savings, income policies, Nigeria
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References
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