IMPACT OF INTEREST RATE LIBERALISATION ON SELECTED MACROECONOMIC INDICATORS IN NIGERIA

IMPACT OF INTEREST RATE LIBERALISATION ON SELECTED MACROECONOMIC INDICATORS IN NIGERIA

ABSTRACT

This research examines the impact of interest rate liberalisation on selected macro-economic indicators in Nigeria.  Employing ex-post factor  design and using GDP per capita as growth indicator, Total Financial Savings (TFS) as a proxy for savings and Credit to Private Sector as a proxy for investment.  The research established a negative relationship between interest rate liberalisation on economic growth, savings and investment which were represented by indices calculated using ordinary Least Square. This research finds that interest rate liberalisation have negative and insignificant effect on economic growth, savings and investment in Nigeria.  This supports the numerous past studies which have reported negative results regarding the effects of interest rate liberalisation on economic growth. The research concludes that interest rate liberalisation have negative and  insignificant effect on credit to private sector, saving and economic growth in Nigeria.