Causes of Interest Rate Volatility in Nigeria

Wehnam Peter Dabale and Nelson Jagero

International Journal of Financial Economics, 2013, vol. 1, issue 1, 42-47

Abstract: This paper analyzed the causes of interest rate volatility in Nigeria for the period between January 2000 and December 2005 using an econometric model. The empirical analysis starts by analyzing the series properties of the data which is followed examining the nature of causality amongst the variable using the SPSS version 17 software packages. The results from the study indicated that interest rate exerted significant negative effects on the money supply and the required reserved ratio during the period. 10% decrease in Interest Rate will increase money supply by 4.09% and 10% decrease in interest rate will increase the required reserved ratio by 1.01%. In addition, the study recommended the diversification of the Nigerian economy by investing in other sectors of the economy and the empowerment the Federal Inland Revenue Services in prosecuting tax evaders and improvement on tax collection mechanisms to minimize tax evasion.

Keywords: Regression Analysis; Interest Rate money supply; required reserve ration; Nigeria (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (2)

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