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ABSTRACT
Monetary policy is channeled through the banks to affect the general economy. It is on this premise; this study examines the effect of monetary policy changes on the performance of deposit money banks in Nigeria. Data for this study was collected from the investigated banks’ annual financial report and Central Bank statistical bulletin covering 2016 to 2021. The generalized method of moments (GMM) in first difference was applied on panel data to capture the effect of monetary policy changes on banks the performance (measured using return on asset). This study found that monetary policy changes significantly determine the performance of deposit money banks. Specifically, monetary policy rate has positive and significant effect on bank performance, while cash research ratio and money supply significantly but negatively account for the performance of deposit money banks. Based on this finding, this study recommends that bank managers should pay careful attention to changes in money policy because of the effect it may have on bank performance; and that Central Bank should exercise caution on the used of cash reserve ratio because of the adverse effect of the instrument on bank performance.
