POLICY BRIEF - An Empirical Analysis of the Interaction between Monetary Policy

The data showed structural breaks in 2004Q2, 2009Q3 and 2014Q3, which coincided with the 2004 banking consolidation, the 2009 Sanusi-led regulatory measures and the appointment of Godwin Emefiele as the Governor of the Central Bank of Nigeria in 2014. [...] Following the consolidation, credit to the private sector significantly outstripped credit to the public sector AN emPiricAl ANAlysis of the iNterActioN BetweeN moNetAry Policy ANd commerciAl BANk leNdiNg 9 as banks began to provide margin facilities for the purchase of shares and other trading activities. [...] It reveals that the growth of credit to the private sector over the period stagnated against the growth of credit to the public sector owing largely to the adoption of some disciplinary measures. [...] Following a general evaluation covering the post-liberalization period (1986 to 2019), it looked at the changes that may have occurred in the transmission mechanism of the policy instruments of interest given the 2004, 2009 and 2014 regime changes, and the reforms in each regime. [...] The atmosphere of insecurity felt in the financial system led to the deliberate withholding of advances in the private sector.