| Summary, etc |
This study examined the impact of macroeconomic variable on liquidity management of Nigerian<br/>deposit money banks. The research population consist of 22 deposit money banks in Nigeria.The<br/>list of deposit money banks was drawn using stratified random sampling based on the criteria of<br/>banks with international authorization. The study adopted the ex post facto research design, the<br/>study is based on the arbitrage pricing theory (APT) propounded by Ross (1976). The study made<br/>use of secondary data extracted from the semi-annual audited report of the five banks respectively<br/>and central bank statistical bulletins from the period of 2011-2020. The study used regression and<br/>correlation analysis to test the relationship between inflation rate, interest rate, exchange rate and<br/>liquidity management of deposit money banks, liquidity ratio is used to represent the liquidity<br/>management of deposit money banks. The findings showed that the inflation rate showed a positive<br/>and insignificant relationship with liquidity ratio, exchange rate showed a negative and significant<br/>relationship but insignificant relationship at significant level. The independent variables jointly do<br/>not have a significant relationship or impact on liquidity ratio of deposit money banks in Nigeria.<br/>This is because the value is more than the significant benchmark. The study recommends that the<br/>deposit money bank should come out with products that will help them in hedging against<br/>exchange rate so as not to adversely affect their profitability. And the central bank as the regulatory<br/>authority should come out with better inflation expectation methodology executive inflation<br/>eroding the capacity of the banks to make more profit.<br/> |
