IIARD International Institute of Academic Research and Development

Journal of Accounting and Financial Management (JAFM )

E-ISSN 2504-8856
P-ISSN 2695-2211
VOL. 10 NO. 12 2024
DOI: 10.56201/jafm.v10.no12.2024.pg284.308

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Naira Redesign and the Liquidity of Commercial Banks: A Survey Study from Port Harcourt

Daniel Ikezam Nwonodi

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Abstract

This study examined the relationship between naira redesign and the liquidity of commercial banks in Port Harcourt. The objective of the study was to examine how naira redesign policy affects liquidity position of commercial banks within the period. Commercial bank liquidity was the dependent variable while naira redesign measured by naira scarcity, limit to customer withdrawal, limit to customer deposit and electronic fund transfer. Four research questions and six null hypotheses were formulated to examine the relationship between the dependent and the independent variables. Simple percentages, frequency tables and spearman rank correlation coefficient were used as data analysis techniques. The study found a correlation coefficient of 83.2 per cent between naira scarcity and liquidity of commercial banks, 74.1 per cent between customer withdrawal limits and the liquidity of commercial banks in Port Harcourt, 77.9 per cent between customer deposit shortages and the liquidity of commercial banks in Port Harcourt and 68.5 per cent between customer fund transfers and the liquidity of commercial banks in Port Harcourt. From the findings, the study concludes that there is significant relationship between naira redesign and liquidity of commercial banks in Port Harcourt. We recommend that strategies to increase customer deposits from the rural branches and the urban to enhance liquidity of the commercial banks, regulatory authorities and the banker committee should ensure the implementation of electronic withdrawal limit for customers to ensure commercial banks are liquid to meet liquidity obligations and the Central Bank of Nigeria and the banker committee should ensure the implementation of policies to enhance availability of cash; this will enhance commercial banks liquidity in Nigeria.

keywords:

Naira Redesign, Liquidity, Commercial Banks, Port Harcourt

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