Money Market Operations and Money Supply in Nigeria

G. I. Anyanwu; Duruechi, Anthony H.; Ike James

doi:10.70382/ajaias.v13i2.0106

Authors

Prof. G. I. Anyanwu Department of Banking & Finance, Faculty of Administration and Management Sciences, Imo State University, Owerri, Imo State, Nigeria Author
Dr. Duruechi, Anthony H. Department of Banking & Finance, Faculty of Administration and Management Sciences, Imo State University, Owerri, Imo State, Nigeria Author
Mr. Ike James Department of Accounts, Judiciary High Court of Justice, Owerri, Imo State, Nigeria Author

Abstract

The study investigated the effect of money market operations and money supply in Nigeria from 2000 to 2024. Money market operations were disaggregated into treasury bills, certificates of deposit, commercial paper, and bankers’ acceptance while broad money (m₂) was used as a proxy for money supply. The quasi-experimental research design was adopted where secondary data on the above-stated dependent and explanatory variables were sourced from the 2024 edition of the Central Bank of Nigeria (CBN) bulletin. The data generated were analyzed using the ARDL model. The study found that treasury bill (tb) has negative significant effect on money supply in Nigeria, certificates of deposit (cd) has positive insignificant effect on money supply in Nigeria, commercial papers (cp) has positive insignificant effect on money supply in Nigeria and bankers’ acceptance (ba) has negative insignificant effect on money supply in Nigeria. It was therefore concluded that money market operations have a significant effect on money supply. The study recommended that there is need to increase the issuance of money market instruments in Nigeria since the money market operations have positive significant effect on money supply.