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Exogenous Variables and their Influence on Domestic Credit Provision in Nigeria: Evidence from Quantile Regression

Author

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  • Nzeh Innocent Chile

    (Department of Cooperative and Rural Development, University of Agriculture and Environmental Sciences Umuagwo, Imo State, Nigeria.)

Abstract

The relevance of domestic credit to an economy has spurred interest in studies that seek to examine the factors that determine it. In this study, the focus is to evaluate the role of exogenous factors in influencing domestic credit provision in Nigeria. The study used a monthly dataset that covered the period from 2007M12 to 2024M5 under the framework of quantile regression. The findings of the study reveal that oil price had a positive and significant impact on domestic credit provision at all the quantiles, while world interest rate had a negative and significant impact on domestic credit provision at the 25th quintile. The exchange rate and bank reserves exerted a positive and significant impact on domestic credit provision at all the quantiles, while the impact of the Treasury bills rate was positive and significant only at the 25th and 50th quantiles. The study suggests that, in regulating credit provision in Nigeria, monetary authorities should closely monitor these exogenous variables as well as exchange rate movement.

Suggested Citation

  • Nzeh Innocent Chile, 2024. "Exogenous Variables and their Influence on Domestic Credit Provision in Nigeria: Evidence from Quantile Regression," Naše gospodarstvo/Our economy, Sciendo, vol. 70(4), pages 38-48.
    • Handle: RePEc:vrs:ngooec:v:70:y:2024:i:4:p:38-48:n:1004
    DOI: 10.2478/ngoe-2024-0022
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    References listed on IDEAS

    as
    1. Kim, Soyoung & Roubini, Nouriel, 2000. "Exchange rate anomalies in the industrial countries: A solution with a structural VAR approach," Journal of Monetary Economics, Elsevier, vol. 45(3), pages 561-586, June.
    2. Adetutu, Morakinyo O. & Odusanya, Kayode A. & Ebireri, John E. & Murinde, Victor, 2020. "Oil booms, bank productivity and natural resource curse in finance," Economics Letters, Elsevier, vol. 186(C).
    3. Benoit, Dries F. & Van den Poel, Dirk, 2017. "bayesQR: A Bayesian Approach to Quantile Regression," Journal of Statistical Software, Foundation for Open Access Statistics, vol. 76(i07).
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Domestic credit; Monetary policy; Interest rate; Exchange rate; Quantile regression;
    All these keywords.

    JEL classification:

    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E43 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Interest Rates: Determination, Term Structure, and Effects

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