Appraising the Money Market in the Economic Development of Nigeria: Challenges and Prospects

Anochie Uzoma C., Ude Damian Kalu and Chukwu Bonaventure

International Journal of Financial Markets, 2016, vol. 2, issue 2, 39-50

Abstract: The growing importance of the money market in the Nigerian economy since the last decade has helped to stimulate interest among a wide variety of people in the study and practice of money market structure. This growing interest manifests in the large volume of money now circulating within the Nigerian economy. The trend clearly reveals a need for this research work. In view of this, the research study therefore sets out to assess the Nigerian money market in the economic development of Nigeria: challenges and prospects. The credentials of the Nigerian money market have in turning around the Nigerian economy, through government monitoring policies such as the open market operations, fiscal policy, direct control, purchase and sale of securities and borrowings. Despite the challenges militating against the efficiency and effectiveness of the money market operations in the Nigerian economic development such as inflation, high interest rates, devaluation of the naira, exchange rates, among others, still the Central Bank of Nigeria has succeeded in battling these challenges through financial institutions (intermediaries) through which the money market is surviving these challenges. The population of the study includes selected banks in Nigeria and the users of funds. Descriptive and quantitative research methods were used in the collection of data mainly from the Federal Office of Statistics and Banks. Based on the responses, the money market is found to be effective despite its challenges. The research recommends that the Central Bank of Nigeria should step up the improvement of the money market through reduction of interest rates and provision of funds for small and medium scale enterprises in Nigeria.

Keywords: Money market; Economic Development; Challenges; Prospects. (search for similar items in EconPapers)
Date: 2016
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