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ABSTRACT
The purpose of this study was to ascertain the effect of macroeconomic variables on deposit money bank performance in Nigeria. However, in order to achieve the objectives of this study, we utilised four explanatory variables as proxies for macroeconomic variables (exchange rate, inflation rate, interest rate and crude oil price) while banking sector return on assets was used as a proxy for deposit money bank performance in Nigeria. The study covered a time period of 2000-2022 (23years). Regression Analysis was utilised for the study’s Analysis. It was discovered that: there is a positive and significant relationship exchange rate and deposit money bank performance; Inflation rate has an insignificant effect on deposit money bank performance; interest rate has an insignificant effect on deposit money bank performance; and crude oil price was found to have a positive and significant effect on deposit money bank performance. As a result of these findings, it was recommended that: the Central Bank of Nigeria (CBN) should make efforts to develop indirect monetary instruments and exercise appropriate control over the monetary sector; the government through their fiscal and monetary policy tools should also try and come up with more responsive mechanisms to better react to ever changing macroeconomic shocks affecting the country; and monetary authority should strive to minimize or reduce this rate coupled with cash reserve requirement so that banks will be in better position to give more credit facilities to the public and in turn enhance the overall development of the banking sector.
