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ABSTRACT
The performance of deposit money banks is a function of majorly the monetary policies adopted in the country and this invariably has a multiplier effect on the economy developmental processes. Hence, this study seeks to examine the effect of monetary policy on deposit money banks performance in Nigeria for the period 2012-2021. The study employed the descriptive statistics, correlation analysis and the Panel Least Square (PLS) methodology to analyze the panel data sourced from CBN Statistical Bulletin and the financial reports of the respective banks. The findings specifically found that monetary policy rate has significant negative effect on deposit money banks performance while cash reserve positively and significantly affect deposit money banks performance. Also, money supply has a significant positive effect on deposit money banks performance. The study concludes that monetary policy tools play a key role in deposit money banks performance in Nigeria during the studied period. The study recommends that regulatory authority (CBN) should reduce the current monetary policy rate in order to reverse its negative effect on deposit money banks performance. Increase in cash reserve and money supply improves the performance of deposit money banks. Thus, increase in cash reserves and money supply should be maintained within acceptable threshold to enable the deposit money banks to sustain its positive effect on their performance.
