Impact Of Monetary Policy Tools On Capital Formation In Nigeria:- Iheke, Francisca O

ABSTRACT

The main thrust ofthe study was to investigate the impact ofmonetary policy on capital formation in Nigeria. Time series data spanning from 1990 to 2016 was used for the study and analyzed with the aid of multiple regression analysis. Monetary policy was measured by monetary policy rate, liquidity ratio and cash reserve ratio while capital formation was proxies by gross fixed capital formation. The findings revealed that monetary policy rate and liquidity rate exerted negative impact on capital, but monetary policy rate was significant while liquidity ratio was insignificant. Also, cash reserve ratio was positive and significant. It was recommended that investors in Nigeria should take into cognizance monetary policy actions in their decision making process.