Money Market Operations and Credit to Private Sector in Nigeria

Abstract

This paper examined the effect of money market operations on credit to private sector in Nigeria from 2000 to 2024. Money market operations were disaggregated into treasury bills, certificates of deposit, commercial papers, and bankers’ acceptances while credit to the  private sector  as the endogenous variables. A quasi-experimental research design was adopted whereby 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 so generated were analyzed using the ARDL model. The study found that treasury bills (tb) has a negative significant effect on credit to private sector in Nigeria, certificates of deposit (cd) has positive insignificant effect on credit to private sector in Nigeria, commercial papers (cp) has positive insignificant effect on credit to private sector in Nigeria and Bankers acceptance (ba) has negative significant effect on credit to private sector in Nigeria. It was therefore concluded that money market operations have a significant effect on credit to private sector. The study recommends that there is need for regulatory authorities to increase the issuance of money market instruments as this would enhance credit to the private sector.