Determinants of Excess Liquidity in the Nigerian Banking System

Wilfred I. Ukpere (), Augustine Ujunwa () and Okoyeuzu Chinwe
Additional contact information
Wilfred I. Ukpere: Department of Industrial Psychology and People Management, Johannesburg Business School, College of Business and Economics, University of Johannesburg, South Africa

Journal of Reviews on Global Economics, 2018, vol. 7, 516-526

Abstract: This study examines the determinants of excess liquidity in the Nigerian banking system using generalized autoregressive conditional heteroscedasticity (GARCH) for the period January 2008 to December 2015. The identified determinants of banking system excess liquidity are capital importation, Federation Account Allocation Committee (FAAC) distribution, exchange rate premium and policy instruments such as cash reserve ratio, special lending facility rate, Treasury bill rate and interbank rate. The empirical result revealed that the identified determinants have significant effect on banking system excess liquidity in Nigeria. Based on the findings, the study recommends that Nigerian monetary authority could rethink liquidity management in terms of developing robust strategies for mopping up the excess liquidity from the identified sources, rather than concentrating liquidating management strategy on the banking system.

Keywords: Banking System; Excess Liquidity; Monetary Policy. (search for similar items in EconPapers)
Date: 2018
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.lifescienceglobal.com/independent-jour ... erian-banking-system

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:lif:jrgelg:v:7:y:2018:p:516-526

Access Statistics for this article

Journal of Reviews on Global Economics is currently edited by Michael McAleer and Chia-Lin Chang

More articles in Journal of Reviews on Global Economics from Lifescience Global
Bibliographic data for series maintained by Faisal Ameer Khan ( this e-mail address is bad, please contact ).