IIARD International Institute of Academic Research and Development

INTERNATIONAL JOURNAL OF ECONOMICS AND FINANCIAL MANAGEMENT (IJEFM )

E-ISSN 2545-5966
P-ISSN 2695-1932
VOL. 3 NO. 2 2018

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Effect of Open Market Operations (OMO) on Economic Development, 1986 -2016.

Richard Osadume (Ph.D, FCIB)

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Abstract

This Study examined the Effect of Open Market Operations (OMO) on Economic Development (1986-2016). The objective of this study was to examine the Effect of – Treasury Bills rates and Treasury Certificates rates on economic development. The study employed secondary data and used Nigeria as its sample; the investigation employed the OLS, Co-integration, Granger- causality and ECM Analytical techniques, to test the impact of the independent variables (treasury bill rates and treasury certificate rates) on the dependent variable, economic development (proxied by Human Development index) and tested at the 5% level of significance. The findings showed that Open Market Operations captured by Treasury Bills and treasury certificates, both had no significant effect on economic development in the short-run but showed a positive and significant effect in the long-run period on economic development with significant speed of adjustments. The study concludes that Central Bank Open Market Operations represented by Treasury Bills and Treasury Certificates do exert significant effect in the long-run on economic development and recommends amongst others the creation of adequate product awareness by the monetary authorities to raise public patronage of these financial products and also, to allow enough operational time lag to enable relevant formulated policies achieve their desired objectives.

keywords:

Treasury Bills; Treasury Certificate Rates; Human Development index; Economic development; Open Market Operations.

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