The Nigerian Money Market: Issues, Prospects And The Way Forward
Igbinosa O S PhD
Banking and Finance Department, University of Benin
Ateboh-Briggs Patricia B
Banking and Finance Department, University of Benin
Keywords: Money Market instruments, econometrics approach, Nigeria
Abstract
The study examined the inter relationships prevailing in the money market as it relates to its instruments and the cumulative (Total) Value of the Money Market instruments (TVMM). It considered empirically the value of money market instruments: Treasury Bills (T__BILL), Commercial Bills (CMB) and Bankers Acceptance (BKA) relationships on the total value of the Money market instruments; 1981-2017. The methodology adopted for this study was basically using the econometrics tools for data analyses. The Unit Root Test, the (Augmented Dickey Fuller (ADF) Results) were used as Stationery test, Johanson’s integration analysis and the VECM and the Causality (Granger) test. It was noticed that, the ECT t-,, T__BILL and CMB were negative and statistically significant. However, TVMM and BKA were both positive and statistically not significant. Contrary to our apriori expectation, it was observed that the T__BILL and CMB are negatively signed while the ECM is negatively signed as expected. While, TVMM and BKA were positively signed as expected. Also, the study found a bi-directional causal degree of affinity connecting TVMM- the reliant and the not dependent variables T__BILL and BKA but none with CMB. Based on these results, it was recommended that since the Treasury Bill (T__BILL) and Commercial Bills (CMB) could possess a n0n positive impact on the total value of the Money market (TVMM) instruments and their causal relationship is bi-directional, proper monetary policies should be put in place and implemented and implemented by the regulatory authorities for Money market to possess a non negative influence on the expansion of the economy of Nigerian.