IMPACTS OF QUANTITATIVE MONETARY POLICY TOOLS ON DEPOSIT PERFORMANCE OF COMMERCIAL BANKS, A CASE OF CRDB Plc, TANZANIA

Purpose: Monetary policy is a measure designed by the central banks to regulate the quality of money in circulation. This study investigates the impacts of quantitative tools of monetary policy instruments on the performance of deposit of commercial banks, a case of CRDB bank. Specifically, the study establishes the significant effect of Cash reserve ratio, liquidity ratio and bank discount rate on the deposit performance of the bank. Methodology: To address these objectives, research questions, stated hypothesis and relevant data mainly from secondary sources were included. The secondary data included; monetary policy statement, textbooks on related materials, books, policies, research, official reports, and CRDB annual reports in order to have knowledge of Monetary Policy on the deposit performance in CRDB Bank. The Ordinary Least Square (OLS) methodology was used to analyze the relationship among the variables. Data were presented in tables, based on models specified; the hypotheses were tested using regression analysis by employing STATA. Findings: The findings revealed that cash reserve ratio and bank discount rate have significant effect on the performance of bank deposit. However, the study found that liquidity ratio has no significant contribution to the performance of the bank deposit. The study concluded that various monetary policies managed through those variables have probably been adequately applied to help suitable performance of Bank. Recommendations: The study recommends that central bank should make monetary policies the preferred efficient provider of favorable environment in terms of the implementation of the appropriate monetary policy in order to attract both domestic and foreign direct investment which will create jobs. In addition, bank of Tanzania should introduce more monetary instruments that are flexible enough to meet the ever-growing financial sector in a view to lessen their financial burden and enable investment. The study further recommends that commercial banks should focus on monetary policy changes to the extent of complying with the Central Bank guidelines and adjusting their variables accordingly. This is a matter of management efficiency.