Causes of Interest Rate Volatility in Nigeria
Journal Title: International Journal of Financial Economics - Year 2013, Vol 1, Issue 1
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.
Authors and Affiliations
Wehnam Peter Dabale, Nelson Jagero
Keywords
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