ABSTRACT
Liquidity management seeks ensure the attainment of short-term objective of monetary policy, which means maintenance of desire monetary aggregate. It is very important aspect of monetary policy implementation and control commercial banks create money every creates incompatible with the absorption capacity of the economy macro economic instability may result in order to maintain relative macro economic stability must enhance in place on liquidity management to leave out the saving liquidity growth in the banking system lending and investment operation of commercial bank have been widely and extensively discussed in various literatures. It has also been stated that anyone who express to borrow from commercial bank should be most concerned with the loan and investment policies and techniques. The principal profit making activity of a commercial bank create loan available to its customer and in doing this, it faces uncertainties and therefore risks money kinds. These uncertainties are with regard to its features volume and costs of funds and the future income and price of the various types of assets that it acquire. A bank does not therefore consider earning alone instead is seeks some optimum combination of earning liquidity and safety to secure more or one it must often sacrifice some of the other for instance to get higher earnings a bank many have to incurred more risk and liquidity and vice-versa risk because of the very high ratio of their liability to their total assets. Liquidity and management have implication on bank profitability and ability to meet its obligation both to the regulation authority depositions and shareholder.
