ABSTRACT

The study investigate the effect ofmonetary policy on bank deposit in Nigeria. The objectives of the study were; to investigate the impact ofmonetary policy on bank deposits in Nigeria and Io ascertain ifthere is any long run relationship between monetary policies on bank deposits in Nigeria. Ordinary Least Square regression technique and Johansen co-integration lest were used in the research. Thus revealed that; inflation rate has a negative and significant impact on bank deposit in Nigeria, money supply is positive and significant impact on bank deposit in Nigeria, interest rate has a negative but insignificant impact on bank deposit in Nigeria, exchange rate and cash reserve ratio both have negative and significant impact on bank deposit in Nigeria and there exist a long run relationship between monetarypolicy and bank deposit in Nigeria. From the result ofthefindings, the study recommended that; there is the need Io promote low and stable exchange rate which has the capacity of increasing the circulation of money directly and stimulating economic growth indirectly. Central bank ofNigeria should adopt appropriate monetary policy capable ofreducing cash reserve ratio in Nigeria. Monetary authorities should pursue policies that aim to reduce interest rate and inflation rate in the economy. This will help reduce the level ofuncertainty in the economy while at the same time boosting investors ’ confidence and ensuring accelerated economic growth. Due to the long run effect monetary policy measure should he carefully adopted on bank deposit in Nigeria.