ABSTRACT
Prior to 1986, the rate of interest was administratively fixed at low levels with sectoral targets to encourage investment in the preferred sectors of nigeria economy.With economic reform in 1986,interest rates were deregulated-allowing the market a greater role in rationing financial resources.
This study investigated the relationship between interest rates and macroeconomic stability in nigeria.It also tried to ascertain whether the market determined interest rates are favourable to economic development and stability in nigeria.The following hypotheses were tested.
i) There is no significant relationship between interest rate level and Gross domestic product(GDP)in Nigeria
ii) Interest rate fluctuations are significantly related to exchange rate in Nigeria.
iii) There is no significant relationship between interest rate and inflationaryrate in Nigeria.
The researcher used regression and correlation models to establish the empirical relationship between interest rates and other variables Used in the analysis.the main finding were as follows:
i) A significant and inverse relationship existed between interest
rates and Gross Domestic Product(GDP).
ii) An insignificant relationship was established between interest
rate and exchange rate in Nigeria.
iii) There is no significant relationship between interest rate and
inflationary rate.
From the finding,we conclude that a rise in interest rates is likely to
have a negative impact on economic growth, development and stability in Nigeria, since there is a significant relationship between lower interest rate and economic stability.
Gloria, E (2021). A Study on Interest Rate Structure in Nigeria and its Implication for Macro Economic Stability. Afribary. Retrieved from https://afribary.com/works/a-study-on-interest-rate-structure-in-nigeria-and-its-implication-for-macro-economic-stability
Gloria, Emereonyekwe "A Study on Interest Rate Structure in Nigeria and its Implication for Macro Economic Stability" Afribary. Afribary, 25 Feb. 2021, https://afribary.com/works/a-study-on-interest-rate-structure-in-nigeria-and-its-implication-for-macro-economic-stability. Accessed 22 Nov. 2024.
Gloria, Emereonyekwe . "A Study on Interest Rate Structure in Nigeria and its Implication for Macro Economic Stability". Afribary, Afribary, 25 Feb. 2021. Web. 22 Nov. 2024. < https://afribary.com/works/a-study-on-interest-rate-structure-in-nigeria-and-its-implication-for-macro-economic-stability >.
Gloria, Emereonyekwe . "A Study on Interest Rate Structure in Nigeria and its Implication for Macro Economic Stability" Afribary (2021). Accessed November 22, 2024. https://afribary.com/works/a-study-on-interest-rate-structure-in-nigeria-and-its-implication-for-macro-economic-stability