THE IMPACT OF MONETARY POLICES ON THE PERFORMANCE OF INDIGENOUS FINANCIAL ORGANISATIONS: A FOCUS ON THE NIGERIAN MERCHANT BANKS By SETH ACCRA JAJA, Plz .D, FCIA, CPA Department of Management Rivers State University of Science and Technology Port Harcourt And A. A. MOMODU, Ph.D Department of Banking and Finance Rivers State University of Science and Technology Port Harcourt ABSTRACT This study examines the impact of monetary instrwnents on indigenous financial organisations focusing specifically in indigenous merchant banks. Eight merchant banis:s constituted the sample study areas. A regression analysis was run from the secondary data-annual reports, periodicals and CBN publications of the banks. In addition, a stepwise regression analysis was carried out to screen those variables that are not of much significant cx-planatory variables. Primary data for this study was collected from 8 Merchant banks, through the use of structured questiolli1aire. The Kendall's Coefficient of Concordance was used in testing the degree of variability of the respondents. The chi square was equally used in testing the Null Hypothesis. The result of the regression satisfied that CBN monetary instruments have far reaching impact on indigenous financial organisations. The study also reveal that exchange rate, interest rate, cash reserve are explanatory variables on Merchant banks operations. It is recommended in this study that, in improving upon the Merchant banks performance, government should provided and sustain a conducive regulatory envirorunent that would be beneficiary to various sector of the economy. Most importantly, the researcher also suggests that government should give autonomous power to the apex banks . for efficient implementation of policy and guidelines. INTRODUCTION A very notable feature in most economies is the frequent changes in their macroeconomic policies, which have serious consequences on nearly all economic activities embarked upon by individuals and organisations alike. Macroeconomics Nigerian Journal of Management Sciences Vo l. IV, No. 2 (December) 2003 157