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Money Market Operations and Economic Growth in Nigeria

Okere Peter A. PhD., Odumeh Christian M.

Abstract

This study investigated the effects of money market operations on the growth of Nigerian economy from 1990 to 2023. Money market operation was disaggregated into Treasury bill rate, treasury certificate rate, money supply (broad money and cash reserve as predictor variables white real gross domestic product growth rate was used to measure economic growth. The study employed quasi-experimental research design. The secondary data sourced was analyzed through ARDL model. The study revealed in the individual test of hypotheses that treasury bill has negative and insignificant effect on economic growth rate, treasury certificate has positive and significant effect on economic growth , money supply has positive and significant effect on economic growth and cash reserve ratio has positive but insignificant effect on economic growth . In conclusion, the study revealed a mixed finding between the indicators of money market operations and economic growth. However, the joint test of significance shows that treasury bill rate, cash reserve ratio and money supply collectively affect economic growth in Nigeria for the period of study. The study therefore recommended that government should effectively manage TBC, TBR, MS and CRR since it helps in managing their short-term financing needs, regulate liquidity and influence market rate in the money market.

Keywords

Money MarketTreasury Bill and Treasury Certificate

References

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