IMPACT OF INFLATION ON BANKING PERFORMANCE IN NIGERIA
Abstract
ABSTRACT
The study analyses the performance of commercial banks in Nigeria between 1993 and 2024 paying special attention to inflation. To determine the performance of the banks, the money supply, the inflation rate, and the monetary policy rate were taken as the independent variables whereas the dependent variable was the return on the assets. The bulletin of the Central Bank of Nigeria (2024) was used to access data. The research combined results that the rates of monetary policy have a significant positive effect on return on assets. Moreover, it was found that the broad money supply has a high influence on the return on assets, but the monetary policy rate has positive implications on the return on assets in Nigeria. The results imply that the two aspects of inflation money supply and inflation rate negatively impact the return of assets consisting of deposits accounted at the bank. The authors conclude that proper supervision over money supply and inflation rates is a key solution in achieving growth in the banking industry, which, in its turn, plays a crucial role in business growth and economic prosperity in general.
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